9 Mar 2018
RBA on hold for 17th straight month
- Local and global share markets finished higher this week as investors looked through US tariff implications.
- In local stock news, Telstra and News Corp will merge Foxtel (jointly owned by the 2) with News Corp’s Fox Sports by the end of June. News Corp will own 65% of the new company with Telstra owning the rest.
- The International Energy Agency has said that it expects the US alone will cover 80% of the world’s oil demand growth over the next 3 years, with China remaining the main engine of growth for global oil demand.
- The Reserve Bank of Australia left cash rate unchanged at 1.5% for a 17th straight meeting, citing their comfortableness with both local and global economic conditions, but remaining in no rush to raise rates.
- The Australian economy grew at 0.4% in the December quarter for an annual increase of 2.4%, coming in below market expectations.
- Meanwhile, the RBA governor Philip Lowe tried to the talk the economy and inflation up saying that investors and workers should feel confident that both will rise in the coming years.
- Australia recorded a trade surplus of $1.1bn in January as exports rose 4% and imports fell 2%.
- The Chinese government has set an annual growth target for the world’s 2nd largest economy of around 6.5% for 2018. The Chinese economy grew 6.9% last year.
- The European Central Bank remains ready to increase its asset purchase program (QE) in terms of size and/or duration if the economic outlook became less favourable. However, the Bank did confirm that the current program (30bn euro a month of asset purchases) will run until the end of September 2018, or beyond if necessary.
- President Trump has stated that he would only lift planned tariffs on steel and aluminium imports if Mexico and Canada agree to sign a new agreement. He then flip-flopped on this, following pressure from Congress, providing an immediate exemption for Mexico and Canada while allowing other countries to negotiate exclusions (singling out Australia).
- Voters in Italy delivered a hung parliament, with none of Italy’s 3 main groups achieving a large enough majority to govern alone. Further complicating the result was the large swing to anti-EU parties, which means there is little prospect of a return to mainstream / moderate government.
- Reports have indicated that North Korea is now open to the possibility of talks with the US on denuclearisation.
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