11 Oct 2013
• The Australian share market fell early in the week before recovering strongly to finish the week up, on the back of Wall Street's strong performance overnight
• There is now renewed optimism that the U.S. would soon reach a deal to avert a debt default.
• The Republicans are preparing a plan to pass a 6 week extension to the debt ceiling in order to buy more time for discussions. Obama has apparently signalled his willingness to cooperate.
• In stock news, Air New Zealand has received approval from the Australian Treasurer to lift its stake in Virgin Australia Holdings to 25.9%.
• Bank of Queensland delivered a solid financial result as they reported their full year figures, a significant turnaround on financial year 2012.
• The Aussie dollar has remained at the 94 cent mark against the US dollar for the last week or so, being supported by the US political debacle.
• Both gold and oil prices continued their downward trend.
• The unemployment rate has fallen to a surprise 5.6% from last month’s figure of 5.8%. This may put further pressure on the RBA to remain on hold at the November meeting.
• A survey which looks at the attitudes of households desire to repay debt/mortgage has fallen to its lowest level since 2007, which may lead to a fall in the savings rate and pick up in credit growth.
• The same survey also found that the attitudes to the wisest place for savings being deposits fell to nearly its lowest level since early 2008 – the result of very low deposit rates.
• Business confidence rebounded to its highest level in 3.5 years and job ads ticked up for the month, possibly providing a tentative sign of a turning point in the domestic employment market.
• In contrast to business confidence figures, business conditions remain negative and well below the long term average. Mining remains weak, near the worst since 1999, whilst non-mining edged up from a 4 year low.
• No economic data to mention from the US given the government is in shut-down – this means no compiling or reporting of data…..economists won’t know what to do with themselves!
• The World Bank has lowered its growth forecast for China and other emerging Asian economies for both 2013 and 2014. Both will still grow at reasonably high rates above 7%, in contrast to the developed world where growth rates are sub 2% on average.
• Clive Palmer has struck a deal with Australian Motoring Enthusiast Party senator-elect Ricky Muir to form a balance-of-power voting bloc of four seats in the Senate from next July.
• Palmer is threatening to block the Abbott government's legislation unless his party gets more staff and resources which he says they will need to properly scrutinise legislation.
• On Sunday night we will know who the new leader of the Labor party will be. The leadership context is expected to go down to the wire, with some pundits having Bill Shorten slightly ahead of Anthony Albanese.
• The US policy of not negotiating with “terrorists” has surprisingly reared its head in politics with President Obama accusing the Republicans of engaging in extortion and telling them that we’ll negotiate when the Republicans remove the threat of default…..not sure we can refer to Republicans as terrorists…..but then again, it depends on your definition of a terrorist.
•President Obama nominated current US central bank vice chair Janet Yellen as the next chairwoman
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