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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

Despite a quiet week for data releases we did see some volatility around the globe. Bitcoin rallied to a new high after earlier falling over 5% after $31m was stolen (I don’t know how you steal a digital currency), Zimbabwe president Robert Mugabe finally resigned after a 37 year reign and US equities hit another fresh all-time high. The tradition of “Black Friday” trading in the US last Friday, marking the start of the Christmas shopping spree, is no longer contained to the US market. We now have a cyber Monday and in Australia Amazon formally launched their retail operations. This is expected to put downward pressure on retail margins and profitability which will be good for consumers but will also put downward pressure on wage incomes of those employed in affected sectors.

One of the observations drawn by investment bank UBS as part of their research into the impact of Amazon’s arrival is that Australian consumers are most likely to target electrical goods, apparel and shoes, and cosmetics from Amazon Australia.

Their findings are summarised in the chart below:.

What product are Australian consumers most interested in from AMZN?

Back to financial markets, locally the Australian dollar hit a five month low last week after the RBA voiced concerns over sluggish wage growth and low inflation, signalling it was in no hurry to raise the cash rate. In futures markets, the probability of a September 2018 RBA rate increase fell to 50% from 55% a week earlier, with the first rate rise not fully priced in until early in 2019.

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Source: Rural Bank


Disclaimer: Whilst all care has been taken in compiling the information, the information should not be relied upon as substitute for professional advice where necessary. Rural Bank accepts no responsibility for the accuracy, completeness or timeliness of the information and disclaims all liability in relation to any loss or damage suffered by the use of or reliance upon any information contained herein or in any attachment or annexure hereto by any person. Rural Bank – A Division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL 237879