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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

Good morning and welcome to the first edition of the Weekly Commentary for 2018. With the Ashes test series completed and the summer holidays behind us (at least until the end of January), its back to “business as usual” for many.

Financial markets have continued to embrace the theme of synchronized global economic growth with only a moderate uplift in inflation.

In equity markets, we have seen Wall Street start the year posting a new record high, European shares rallying strongly, while Japan’s Nikkei posted a two-decade high last week. Our share market also posted gains, continuing to benefit from strong commodity prices, rising to a 10-year high last week. Meanwhile, long term yields have moved higher and are now up to 20 basis points higher than levels a month ago.

Regarding RBA moves, the futures market is implying about 25 basis points of RBA rate hikes over the next 12 months and virtually unchanged over the last month. The first full rate hike is not priced in until December 20118. (refer chart below).

Cash Rate Pricing Chart

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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 Limited 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 Limited ABN 74 083 938 416 AFSL 238042.