RBA TO HOLD TOMORROW, US RATE RISE IMMINENT

Markets here are not expecting any movement in rates tomorrow when the RBA Board meets for the final time in 2016. Governor Lowe has already signalled the impact on a cash rate decision on housing sector as an important criterion that the RBA will factor in as it sets the monetary policy. Certainly a rate cut is ruled out - and there is no basis for a rate rise here under a low inflation and low growth environment. In fact we expect the cash rate to hold at the current levels through to the end of 2017. 
The news from the United States is quite different. The latest jobs data showed that 178,000 new jobs were created in October and the unemployment rate has fallen from 4.9% to 4.6% which is the lowest since August 2007. The Trump victory and his election campaign calling for more US jobs and more local manufacturing is what the Americans are looking at from an implementation perspective from the new President elect. A rate rise decidsion by the Fed looks imminent. 

OPEC LIMITS OUTPUT - OIL PRICES RISE

OPEC, the world's primary oil producing nations have agreed to cut oil production by 4.5% or by 1.2m barrels per day to boost oil prices above USD 50 per barrel. It's a long shot from the low of USD 28 around mid January 2016. Brent crude jumped week on week by about 15% to close at USD 54.46 up from last week's close of 47.24 and motorists will have to pay higher crude prices at the pump soon when the new prices flow through to the retail market. 

market data

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Australia Cash rate
Australia 90 day bank bill
Australia 10 y bond
US 10y Govt bond
AUD/USD
AUD/EUR
AUD/JPY
AUD/CNY
ASX 200
S&P 500
Dow Jones Industrial Average
Shanghai Composite
Brent Oil (USD per BBL)
Gold Spot (USD per oz)
Iron Ore

As at 3-Dec
1.50
1.76
2.86
2.38
0.7411
0.6940
84.47
5.1010
5,444
2,191
19,170
3,243
54.46
1,177
74.57

As at 25-Nov
1.50
1.76
2.71
2.36
0.7431
0.7030
84.29
5.1385
5,507
2,213
19,152
3,261
47.24
1,183
71.81