Investor Signposts: Week Beginning February 6 2011

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The big picture China is now the second largest economy in the world. Australia ranks as 13th biggest. But Australia is regarded as an advanced economy whereas China is defined by the IMF as an “Emerging and Developing” economy. So what defines the level of advancement? Certainly there are many ways that can economies can […]

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Weekly market & economic update – 4 February 2010

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Headline developments Nature continued to wreak havoc in Australia, with Cyclone Yasi smashing into North Queensland as a category 5 storm (the highest they get) leaving a trail of devastation. Fortunately due to great preparation and the fact that it missed major population centres there appears to have been only one or two fatalities and […]

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Risk that La Niña could persist over 2011

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La Niña update The current La Niña weather event is responsible for the flooding across eastern and southern Australia as well as the severe Tropical Cyclone Yasi. The current La Niña event is the most significant since 1917 and is having widespread effects on the economy and the broader community. CommSec has been monitoring the […]

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Reserve Bank signals rates on hold

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RBA Statement on Monetary Policy The recent floods and softer-than-expected economic data have caused the Reserve Bank to tinker with short-term forecasts, but the longer-term forecasts are unchanged. Given the weaker near term growth forecasts, CommSec has pushed out its rate call from April to May. The December 2010 GDP forecast has been slashed from […]

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The threat of inflation in Asian & emerging markets

Key points Rising inflation is becoming a major concern in Asia and other emerging countries. So far it’s largely due to higher food prices. Non-food inflation remains reasonably benign. However, with strong growth having used up excess capacity and monetary conditions remaining easy, a flow on to higher non-food inflation is a growing risk. As […]

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House approvals remain at 18 month lows

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Building Approvals; Trade; New Vehicle Sales; PSI Approvals to build news homes rose by 8.7 per cent in December. However all the gains were centred on apartment approvals – which tend to be volatile. Apartment approvals surged by 23.4 per cent in December after sliding by 8.5 per cent in the prior month. The all-important […]

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Food prices fall; Housing remains depressed

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New Home Sales; Average Retail Prices A raft of supermarket items fell in price over the past three months. On average almost half of regularly surveyed grocery items were cheaper in the December quarter than three months ago. New home sales eased by 0.6 per cent in December. Over the calendar year 2010, new home […]

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Floods take toll on corporate Australia

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NAB Business Survey; PMI The NAB business confidence index fell from +6.2 to -2.7 in December – the weakest reading in 20 months. The business conditions index rose from +3.7 in November to +5.8 in December. Excluding Queensland the confidence reading fell to +1.0, while conditions rose to +9.0. Forward looking sub-indices remained decidedly weak […]

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Floods will have no impact on interest rates

Reserve Bank Board meeting The Reserve Bank Board has left the cash rate at 4.75 per cent at its first meeting for 2011. The next meeting is on March 1 2011. The Reserve Bank Board provided a relatively long accompanying statement, paying particular attention to the floods. In short, the RBA says that the floods […]

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Home prices at 18-month lows

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Home prices Capital city home prices rose by 0.2 per cent in seasonally adjusted terms in December after falling by 0.1 per cent in November according to the RP Data-Rismark Hedonic Australian Home Value Index – the largest property database in Australia. Outside capital cities, prices fell by 0.3 per cent in December. Capital city […]

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