It’s December, summer is here and holidays are just around the corner. We take this opportunity to wish you and your family a happy festive season!
The big story on the global economic front continues to be inflation, and how high interest rates will go to tame it. November began with the US Federal Reserve hiking its federal funds target range by another 75 basis points to 3.75-4.00%. There are signs the tough approach is working, with the annual rate of inflation falling from 9.1% in June to 7.7% in October.
In Australia, the Reserve Bank lifted the cash rate another 25 basis points to a decade high of 2.85%. Inflation fell to 6.9% in the year to October, down from 7.3% in September, but remains high and economic signals are mixed. Reserve Bank governor Philip Lowe is keeping a close eye on consumer spending, where higher interest rates are having an impact. Retail trade fell 0.1% in October for the first time this year. And while the ANZ-Roy Morgan consumer sentiment index was up 5.6% to 83.1 points in the last three weeks of November, it remains 22.9 points below the same week last year. But rate hikes are not yet affecting the labour market, with unemployment falling to a 48-year low of 3.4% in October, while annual wages growth rose 1% to 3.13% in the September quarter, the fastest growth in a decade.
The Aussie dollar lifted 3c to around US67c over the month, crude oil prices fell 10% while iron ore lifted 0.5%. Shares remain skittish but positive overall. The ASX200 index rose more than 5% in November while the US S&P500 index was up more than 2%.
The information contained on this web page is for discussion purposes only, is of a factual nature and is not intended to constitute financial product advice. Any advice contained in this website or is General Advice and does not take into consideration your individual objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeking professional advice relevant to your individual needs before making a decision based on this information. We believe the content of this site to be accurate, complete and current, however there are no warranties as to the accuracy, completeness or currency of the content. It is your responsibility to verify any information before relying on it. The content of this site may include technical inaccuracies or typographical errors. Capital 8 Financial Pty Ltd, Corporate Authorised Representative (ASIC No. 1243989) of LFG Financial Services Ltd ABN 28 101 927 413, AFSL 227096. As part of our continuing commitment to client service, the maintenance of client confidentiality and as required by law, LFG Financial Services Ltd complies with the Privacy Act 1988 and conforms with the LFG’s Privacy Policy. For further details please refer to the LFG’s Privacy Policy. We reserve the right to modify the content of this site from time to time.