• Petrol prices ease: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 2.4 cents per litre last week to 108.6 cents a litre – the lowest price in six years (since January 19 2009). Prices have fallen for 10 straight weeks, down 34.2 cents.
• Signs that prices have bottomed: The terminal gate (wholesale) price rose by 2.3 cents a litre over the past week. The Singapore gasoline price has lifted 4.2c a litre over the past fortnight in local terms.

What does it all mean?

• While there are signs that petrol prices are bottoming, they are just signs, not concrete proof that bowser prices are set to rise. Still, petrol prices are at or near the lowest levels in around six years. And motorists are still well in front on filling up the car with petrol compared with a year ago.
• The average household is spending $130 a month on petrol, down $55.50 a month on a year ago and equivalent to a 0.25 per cent rate cut on a $350,000 mortgage.
• The lower cost of petrol has broader benefits for the community than an interest rate cut, affecting all motorists, as well as lowering costs for businesses.
• According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 2.4 cents per litre last week to 108.6 cents a litre. The metropolitan petrol price fell by 2.2 cents to 104.1 cents per litre and the regional price fell by 2.9 cents to 117.6 cents per litre.
• The national average Australian price of diesel petrol fell by 2.1 cents to 127.1 c/l in the week to February 1. Last week the metropolitan price fell by 2.1 cents to 126.1 c/l, while the regional average price fell by 2.2 cents to 127.9 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 1.4 cents to 101.7 c/l), Melbourne (down by 2.4 cents to 102.6 c/l), Brisbane (down by 3.8 cents to 103.1 c/l), Adelaide (down by 2.5 cents to 99.9 c/l), Perth (down by 0.9 cents to 110.2 c/l), Darwin (down by 1.2 cents to 129.1 c/l), Canberra (down by 2.9 c/l to 117.6 c/l) and Hobart (down by 1.4 c/l to 123.4 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at a 14-day high of 103.53 cents a litre, up 2.3 cents on the previous week and up 3.1 cents from 6-year lows.
• Last week the key Singapore gasoline price rose by US$1.65 or 2.9 per cent to US$58.70 a barrel – the second week of gains and up from the near 6-year low (lowest since March 2009) of US$52.20 set on January 13. And due to a weaker currency, in Australian dollar terms the Singapore gasoline price rose by $4.01 a barrel or 5.6 per cent last week to $75.44 a barrel or 47.45 cents a litre. Prices are up 4.2 cents a litre in the past fortnight.
• Figures from MotorMouth show that capital city petrol prices drifted sideways to slightly lower last week.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• The fall in the petrol price waters down the need to cut interest rates again.
• There are few signs that petrol prices are set to rebound sharply, rather they are more likely to stay lows for a period of time. OPEC oil producers are determined to regain market share and squeeze out the higher cost producers.

What do the figures show?

• According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 2.4 cents per litre last week to 108.6 cents a litre. The metropolitan petrol price fell by 2.2 cents to 104.1 cents per litre and the regional price fell by 2.9 cents to 117.6 cents per litre.
• The national average Australian price of diesel petrol fell by 2.1 cents to 127.1 c/l in the week to February 1. Last week the metropolitan price fell by 2.1 cents to 126.1 c/l, while the regional average price fell by 2.2 cents to 127.9 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 1.4 cents to 101.7 c/l), Melbourne (down by 2.4 cents to 102.6 c/l), Brisbane (down by 3.8 cents to 103.1 c/l), Adelaide (down by 2.5 cents to 99.9 c/l), Perth (down by 0.9 cents to 110.2 c/l), Darwin (down by 1.2 cents to 129.1 c/l), Canberra (down by 2.9 c/l to 117.6 c/l) and Hobart (down by 1.4 c/l to 123.4 c/l).
• Yesterday, the national average wholesale (terminal gate) unleaded petrol price stood at a 14-day high of 103.53 cents a litre, up 2.3 cents on the previous week and up 3.1 cents from 6-year lows.
• Last week the key Singapore gasoline price rose by US$1.65 or 2.9 per cent to US$58.70 a barrel – the second week of gains and up from the near 6-year low (lowest since March 2009) of US$52.20 set on January 13. And due to a weaker currency, in Australian dollar terms the Singapore gasoline price rose by $4.01 a barrel or 5.6 per cent last week to $75.44 a barrel or 47.45 cents a litre. Prices are up 4.2 cents a litre in the past fortnight.

·         Figures from MotorMouth show that capital city petrol prices drifted sideways to slightly lower last week.

What is the importance of the economic data?

• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications for interest rates and investors?

• The fall in the petrol price waters down the need to cut interest rates again.
• There are few signs that petrol prices are set to rebound sharply, rather they are more likely to stay lows for a period of time. OPEC oil producers are determined to regain market share and squeeze out the higher cost producers.

The post Further signs that petrol has bottomed appeared first on AdviserVoice.

• 

  Petrol prices rise slightly.

  Petrol prices rise: According to the Australian Institute of Petroleum, the national average Australian price of petrol rose by 0.6 cents per litre to 149.6 cents a litre in the week to October 26.

• Regional prices slide: The key Singapore gasoline price has hit a 28-month low of US$97.55 a barrel, down almost 12 per cent in the past month.
• Cheaper petrol ahead: Today, the national average wholesale (terminal gate) unleaded petrol price stands at 130.6 cents per litre – a 17-month low and down 2.3 cents over the week. In fact the terminal gate price has fallen by almost 10 cents a litre in just over three weeks.

What does it all mean?

• The pump price may have risen substantially over the past fortnight and it may be hard to gauge fuel prices given the varying discounting cycles in many capital cities, but there is good news for motorists with pump prices likely to fall sharply over the coming fortnight. In fact petrol signs boards showing the low $1.30s per litre will become the norm rather than the outlier across major capital cities in the next couple of weeks.
• And if it wasn’t for the shifts in the discounting cycle, cheap fuel would already be on offer. In fact the real driver of the last fortnight’s lift in the national petrol price was the turning point in the discounting cycle and resulting peak. After an unusually long discounting cycle, pump prices in Sydney, Melbourne and Brisbane lifted by 10-15 cents and peaked on October 18/19, inflating the national average price.
• Taking out the vagaries of the discounting cycle, and the global factors suggest cheaper fuel prices lie ahead. The wholesale petrol price remains at levels last seen in early May last year. Similarly the Singapore gasoline price fell by almost $13 in the past month, and is now holding at a 28-month low. Whichever way you cut it cheaper fuel is around the corner.
• The drop in world oil prices reflects more plentiful global supplies in response to only moderately higher demand. It was only a fortnight ago that the International Energy Agency (IEA) cut forecasts of global oil demand for 2014 and 2015. The IEA cut its forecast of demand for OPEC oil by 200,000 barrels per day in both years. In addition the US Energy Information Administration projected a lift in shale oil output with an additional 100,000 barrels per day increase in November. The next crucial junction for oil will be the OPEC meeting on November 27.
• In just the past six months the average monthly household fuel bill has fallen by $10 with further savings on offer in coming weeks. The fall in petrol prices is likely to support confidence levels over coming months and should be better news for retailers.
• Across the Eastern seaboard, motorists would be best served by waiting as long as possible to fill up. Pump prices have hit the peak in the cycle and should ease to fresh lows in coming weeks.

What do the figures show?

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 0.6 cents a litre to 149.6 c/l in the week to October 26. The metropolitan price rose by 0.8 cents to 149.0 c/l, while the regional average price rose by 0.1 cents to 150.7 c/l.
• The national average Australian price of diesel petrol fell 1.2 cents to 152.3 c/l in the week to October 26. The metropolitan price fell by 1.3 cents to 150.3 c/l, while the regional average price fell by 1.2 cents to 153.9 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 2.6 cents to 151.3 c/l), Melbourne (up by 2.9 cents to 149.9 c/l), Brisbane (up by 1.4 cents to 154.3 c/l), Adelaide (down by 5.5 cents to 133.9 c/l), Perth (down by 3.0 cents to 143.0 c/l), Darwin (down by 9.0 cents to 161.7 c/l), Canberra (down by 0.3 c/l to 151.6 c/l) and Hobart (down by 0.6 c/l to 155.4 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 130.6 c/l, – a 17-month low and down 2.3 cents over the week. In fact the terminal gate price has fallen by almost 10 cents a litre in just over three weeks.
• Last week the key Singapore gasoline price fell by US$2.85 or 2.8 per cent to US$97.55 a barrel, a 28-month low. In Australian dollar terms the Singapore gasoline price fell by $3.36 a barrel or 2.9 per cent last week to $111.38 a barrel or 70.05 cents a litre – an 18-month low.
• Figures from MotorMouth show that petrol prices have been mixed across capital cities. In Sydney, Melbourne and Brisbane prices peaked on October 18/19 and have been drifting lower. In Adelaide prices peaked on Oct 1, and have eased for 27 days. And the more stable Perth average petrol price is down around 3 cents a litre over the week.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• Motorists certainly have no reason to complain at present. Not only are pump prices likely to fall further than the recent 15-month lows, but the discounting cycle has been more prolonged in recent times.
• The world is well supplied with oil and cheaper fuel prices should leave households with additional savings in the household budget.
• The economy is showing credible signs of lifting. Confidence levels are healthy, asset classes like share and property are well bid, retail sales is lifting, the labour market is showing signs of improving and the Aussie dollar recently hit a four-year low.
• CommSec expects the Reserve Bank to keep interest rates on hold over the rest of 2014 before feeling more comfortable to lift rates in the second half of 2015.

What is the importance of the economic data?

• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications for interest rates and investors?

• Motorists certainly have no reason to complain at present. Not only are pump prices likely to fall further than the recent 15-month lows, but the discounting cycle has been more prolonged in recent times.
• The world is well supplied with oil and cheaper fuel prices should leave households with additional savings in the household budget.
• The economy is showing credible signs of lifting. Confidence levels are healthy, asset classes like share and property are well bid, retail sales is lifting, the labour market is showing signs of improving and the Aussie dollar recently hit a four-year low.
• CommSec expects the Reserve Bank to keep interest rates on hold over the rest of 2014 before feeling more comfortable to lift rates in the second half of 2015.

The post Petrol lifts, but cheap fuel around the corner appeared first on AdviserVoice.

• 

  Asian shares take a slide.

  Petrol prices rise: According to the Australian Institute of Petroleum, the national average Australian price of petrol rose by 2.8 cents per litre to 147.6 cents a litre in the week to September 21.

• Asian shares slide: Asian sharemarkets fell by over 1 per cent on Monday.

What does it all mean?

• Perhaps there needs to be a degree course in petrol price analysis. Across the major capital cities, petrol prices are moving in different directions while in Darwin, Hobart and regional areas, petrol prices are stubbornly stable.
• Overall though, motorists in capital cities are still enjoying historically-low prices. The good news is that the world is well supplied with oil. The bad news is that OPEC oil producers are seeking to cut back production. While for local motorists, the weaker Aussie dollar is serving to push prices modestly higher.
• Sharemarkets across Asia were sharply lower on Monday with analysts scratching for reasons behind the sell-off. Fears that the US Federal Reserve could tighten monetary policy earlier than previously expected have been weighing on markets for the past few weeks. The term ‘Taper Tantrum’ is quite apt. Higher interest rates would attract investment funds to the US, while higher rates act to restrain a “growth region” like Asia.
• Also not helping proceedings have been comments from China’s Finance Minister. In Cairns for the G20 finance ministers meeting, Lou Jiwei said on Sunday “China will not make major policy adjustments due to a change in any one economic indicator”. He was referring to the weak industrial production reading for August, seemingly ruling out major stimulus to counter-act the slowdown. At time of writing, Australian shares were down 1.3 per cent with Hong Kong down 1.3%, Japan down 0.8 per cent, Korea down 0.9 per cent and China’s Shanghai composite down 1.5 per cent.

What do the figures show?

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 2.8 cents a litre to 147.6 c/l in the week to September 21. The increase in prices reflected the lift from the low point in the discounting cycles in Sydney and Melbourne. The metropolitan price rose by 4.0 cents to 145.8 c/l, while the regional average price rose by 0.3 cents to 151.3 c/l.
• The national average Australian price of diesel petrol was unchanged at 154.9c/l in the week to September 21. The metropolitan price fell by 0.3 cents to 152.6 c/l, while the regional average price fell by 0.5 cents to 156.1 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 8.1 cents to 145.9 c/l), Melbourne (up by 7.1 cents to 142.5 c/l), Brisbane (up by 0.8 cents to 150.3 c/l), Adelaide (down by 4.3 cents to 140.1 c/l), Perth (up by 0.6 cents to 144.6 c/l), Darwin (unchanged at 173.0 c/l), Canberra (down 0.1 c/l to 154.7 c/l) and Hobart (down 0.1 c/l to 158.3 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 137.7 c/l, up 1.7 cents over the week and up by 3.2 cents a litre up on the 15-month low of 134.5 cents set on August 25.
• Last week the key Singapore gasoline price fell by US$2.85 to US$108.85 a barrel – just off the lowest levels in 17 months. In Australian dollar terms the Singapore gasoline price fell by $1.89 a barrel or 1.5 per cent last week to $121.40 a barrel or 76.35 cents a litre.
• Figures from MotorMouth show that petrol prices have been mixed across capital cities. In Sydney, prices hit lows on September 5 and have drifted higher, hitting a two-month high on September 20. In Melbourne, prices troughed on September 12 and now stand at one-month highs. In Brisbane prices peaked on September 13 and have since fallen. And in Adelaide prices peaked on September 14 and have since fallen.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• Consumers are finding conditions quite fluky at present. Petrol discounting cycles have changed in southern and eastern states; the Aussie dollar has softened; and wage growth is modest. But, on the other hand, home buyers are active in refinancing loans to unleash spending power; companies are paying out bigger dividends; and disposable incomes of households are up 4.7 per cent on a year ago – the fastest growth in two years.
• Overall, though, there is still no pressing reason for the Reserve Bank to change interest rate settings.
• The Australian sharemarket has become dearer over July-September, so the current correction is healthy in a longer-term sense. The forward price-earnings ratio has been above the decade average for the past six months. And at levels near 15.54, the price earnings ratio still has further to fall to reach the decade average of 14.86.
• The “normalisation” of US interest rates was always going to be a little bumpy, and some of those speed humps are currently been navigated. But the strength of the recent profit-reporting season has left Australian companies in good shape to ride any volatility, especially the high cash levels being maintained by Corporate Australia.
• Between February 1994 and February 1995, the US Federal Reserve lifted the funds rate from 3 per cent to 6 per cent. Between June 1994 and June 1995, the Japanese sharemarket fell 33 per cent. Between May 1994 and February 1995 the Australian All Ordinaries lost 15 per cent. Between February 1994 and February 1995, the Hang Seng fell by 43 per cent. Janet Yellen assures that the path of rates hasn’t been decided but investors aren’t convinced.

Why is the data important?

• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications?

• Consumers are finding conditions quite fluky at present. Petrol discounting cycles have changed in southern and eastern states; the Aussie dollar has softened; and wage growth is modest. But, on the other hand, home buyers are active in refinancing loans to unleash spending power; companies are paying out bigger dividends; and disposable incomes of households are up 4.7 per cent on a year ago – the fastest growth in two years.
• Overall, though, there is still no pressing reason for the Reserve Bank to change interest rate settings.
• The Australian sharemarket has become dearer over July-September, so the current correction is healthy in a longer-term sense. The forward price-earnings ratio has been above the decade average for the past six months. And at levels near 15.54, the price earnings ratio still has further to fall to reach the decade average of 14.86.
• The “normalisation” of US interest rates was always going to be a little bumpy, and some of those speed humps are currently been navigated. But the strength of the recent profit-reporting season has left Australian companies in good shape to ride any volatility, especially the high cash levels being maintained by Corporate Australia.
• Between February 1994 and February 1995, the US Federal Reserve lifted the funds rate from 3 per cent to 6 per cent. Between June 1994 and June 1995, the Japanese sharemarket fell 33 per cent. Between May 1994 and February 1995 the Australian All Ordinaries lost 15 per cent. Between February 1994 and February 1995, the Hang Seng fell by 43 per cent. Janet Yellen assures that the path of rates hasn’t been decided but investors aren’t convinced.

The post Petrol prices drift higher; Asian shares slide appeared first on AdviserVoice.

• 

  Petrol prices have fallen

  Lending soars. Total lending finance soared by 7.6 per cent in June, underpinned by a 12.1 per cent lift in business lending. Total new lending in June was $72.9 billion – the highest since January 2008.

• Petrol prices fall: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 1.0 cent per litre to 148.3 cents a litre in the week to August 10 – the lowest since the week to December 1 2013. The wholesale price continues to slide, hitting a near 9-month low.

What does it all mean?

• Lending has returned to levels prior to the global financial crisis. In fact, in original terms, lending totalled $84.1 billion in June 2014, the second highest total on record behind June 2007 ($90.8 billion). While growth is being driven by business lending, both personal and housing loans are well up on a year ago. Simply, consumers and businesses are embracing cheap financing. And hopefully in the case of business, some of the extra dollars are being put to work in new investment, in turn leading to the hiring of more staff.
• It may be hard to gauge given the discounting cycles in many capital cities, but there is good news for motorists. The pump price is at 8-month lows and the wholesale petrol price continues to slide, reaching levels last seen in mid-November last year. If the lower prices can be maintained, motorists will save around $13 a month on filling their cars with petrol. Simply the world is well supplied with petrol and global oil demand remains soft.

What do the figures show?

Lending Finance:

• Total new lending commitments (housing, personal, commercial and lease finance) rose by 7.6 per cent in June to a 6½-year high of $72.9 billion. It was the biggest lift in lending in 27 months.
• Housing finance: The seasonally adjusted measure of construction and new purchases rose by 1.8 per cent in June while alterations & additions rose by 2.2 per cent. Home loans are up 10.8 per cent on a year.
• Commercial finance: The seasonally adjusted series for the value of total commercial finance commitments rose by 12.1 per cent in June. Revolving credit commitments rose by 38.4 per cent, the fourth straight gain. Fixed lending commitments rose by 0.9 per cent. Business loans are up 29.4 per cent over the year.
• Personal finance: The seasonally adjusted series for the value of total personal finance commitments fell by 1.8 per cent in June after rising by 8.5 per cent in May. Revolving credit commitments fell by 3.3 per cent and fixed lending commitments fell by 0.6 per cent. Personal loans are still up 11.4 per cent over the year.
• In terms of fixed personal loans, car finance was up by 5.5 per cent over the year; debt consolidation rose by 2.6 per cent; refinancing rose by 7.7 per cent; loans to buy land rose by 18.6 per cent; and “other” loans were up by 18.0 per cent. Overall, personal fixed loans were up by 9.7 per cent over the year.
• Lease finance: Lending rose by 1.2 per cent in June but fell by 12.9 per cent over the year.

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 1.0 cent a litre to 148.3 c/l in the week to August 3. The slide in prices reflected cyclical lows in the discounting cycles that exist in southern and eastern capital cities. The metropolitan price fell by 1.1 cents to 145.5 c/l, while the regional average price fell by 0.6 cents to 154.0 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 3.0 cents to 140.9 c/l), Melbourne (up by 0.6 cents to 144.1 c/l), Brisbane (up by 4.1 cents to 149.8 c/l), Adelaide (down by 11.0 cents to 141.9 c/l), Perth (down by 2.5 cents to 148.3 c/l), Darwin (unchanged at 173.0 c/l), Canberra (down 0.1 c/l to 155.7 c/l) and Hobart (down 0.2 c/l to 160.5 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 136.3 c/l, down around 2.5 cents over the week and the lowest level in almost nine months (November 18 2013).
• Last week the key Singapore gasoline price rose by just US6 cents to US$113.41 a barrel – just above the lowest levels seen in eight months. In Australian dollar terms the Singapore gasoline price rose by 70 cents barrel or 0.6 per cent last week to $122.66 a barrel or 77.14 cents a litre, just above the lowest levels seen in 8½ months.
• Figures from MotorMouth show that petrol prices in Melbourne and Brisbane hit the peak levels in the discounting cycle in the past few days. In Sydney, petrol prices have fallen for 28 days – well past the usual 12-14 days cycle. Adelaide petrol prices are near the lows, having fallen for 15 days.
• Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• The economy has healthy momentum, being provided by recovering consumer confidence, increased lending and solid home construction. While the environment is especially favourable for businesses dependent on home construction and purchase, the outlook is improving for equipment and services businesses and discretionary retailers. The drop in the price of petrol removes one potential source of angst from Aussie consumers.

Why is the data important?

• Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications?

• The economy has healthy momentum, being provided by recovering consumer confidence, increased lending and solid home construction. While the environment is especially favourable for businesses dependent on home construction and purchase, the outlook is improving for equipment and services businesses and discretionary retailers. The drop in the price of petrol removes one potential source of angst from Aussie consumers.

The post Lending hits 6½-year high. Petrol at 8-month low appeared first on AdviserVoice.

• Retail trade rose by a larger-than-expected 0.6 per cent in June after a revised 0.3 per cent fall in May (previously down 0.5%). Annual spending growth rose from 4.9 per cent to 5.5 per cent.
• In the June quarter, inflation-adjusted retail sales fell by 0.2 per cent but grew by 3.1 per cent in the 2013/14 financial year – the best annual growth in six years.
• Strongest growth in the quarter was by “other retailing” including Florists and antique retailers (up 3.2 per cent), followed by “Hardware, building and garden supplies” (up 1.7 per cent), and “Liquor retailing” (1.1 per cent).
• Inflation well contained: The TD Securities-Melbourne Institute monthly inflation gauge rose by 0.2 per cent in July and stood 2.6 per cent higher than a year ago.
• Petrol prices slide: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 3.3 cents per litre to 149.3 cents a litre in the week to August 3. The key Singapore gasoline price and national average wholesale (terminal gate) price have fallen to 8-month lows.
• Hiring again: Job advertisements rose by 0.3 per cent in July after rising 4.4 per cent in June.

What does it all mean?

• The latest economic data was certainly more upbeat than what we have seen in the last couple of months – particularly when it comes to retail sales. Retail sales rebounded in June, with job ads lifting, inflation benign and motorists enjoying some of the cheapest fuel prices in months.
• Aussie households have put concerns about the Federal Budget behind them and are getting on with life. In recent weeks consumer sentiment has lifted back to the levels that existed well over three months ago – before Budget concerns started to dampen Aussie spirits. The rebound in confidence is now translating through to a lift in spending. In fact discretionary (non-food) spending lifted by 0.7 per cent – the strongest result in five months.
• Aussie retailers have certainly faced their share of headwinds over the 2013/2014 financial year. However despite warmer winter weather, election uncertainty, and budget shocks, inflation-adjusted retail sales grew by 3.1 per cent in the 2013/14 financial year – the best annual growth in six years.
• Motorists certainly have no reason to complain at present. Not only are pump prices holding at a 16-week low, but the discounting cycle has been more prolonged, with petrol prices still falling 21 days after hitting the high point in the cycle. Such a sustained fall in fuel prices is unprecedented. Usually the discounting cycle lasts around 10-12 days, however this time petrol retailers have been passing on to motorists the savings from the recent slump in global oil prices. The key Singapore gasoline price and national average wholesale (terminal gate) price have fallen to 8-month lows.
• Inflation remains well and truly in check. The Reserve Bank is firmly on the interest rate sidelines and the rhetoric on interest rate stability is likely to stay. However given the ongoing concerns about the Australian dollar, and contractionary fiscal policy, it is very likely that the Reserve Bank strikes a dovish tone in the statement accompanying the anticipated “no change” interest rate decision tomorrow.

What do the figures show?

Retail trade – June month:

• Retail trade rose by 0.6 per cent in June after a revised 0.3 per cent fall in May (previously reported as down 0.5%). Annual spending growth rose from 4.9 per cent to 5.5 per cent.
• Non-food retailing rose by 0.7 per cent in June – the first increase in four months. Non-food retail spending is up 5.4 per cent on a year ago. Sales by chain-store retailers and other large retailers rose by 0.5 per cent in June after a 0.3 per cent fall in May and were up 5.7 per cent over the year.
• Sales rose in six of the eight states and territories, led by Tasmania (up 1.3 per cent), and followed by the Western Australia (up 1.1 per cent), NSW (up 0.9 per cent), Victoria (up 0.6 per cent), South Australia (up 0.5 per cent) and the Northern Territory (up 0.3 per cent). Sales fell 0.5 per cent in the ACT and were flat in Queensland.

Retail trade – June quarter:

• In real (inflation-adjusted) terms, retail trade fell by 0.2 per cent in the June quarter after lifting by 1.2 per cent in the March quarter. In nominal terms, retail trade rose by 0.1 per cent in the quarter.
• Strongest growth in the quarter was by “other retailing” including Florists and antique retailers (up 3.2 per cent), followed by “Hardware, building and garden suppliers” (up 1.7 per cent), and “Liquor retailing” (1.1 per cent).
• The biggest drop in sales in the quarter was recorded by “Newspaper & books” (down 3.8 per cent), followed by“other specialised food retailing” including butchers, fruit, bread and fish shops (down 3.1 per cent), and“Furniture, floor coverings, houseware, and textile retailers” (down 2.2 per cent)
• Retail inflation lifted just 0.2 per cent in the June quarter. Retail prices are up 2.2 per cent over the year. Prices of goods at “Supermarkets & grocery stores” rose 1.0 per cent, with prices at liquor retailers and takeaway food services both up 0.9 per cent. Prices at pharmaceutical, cosmetic and toiletry retailers fell by 1.9 per cent in the June quarter.

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrolfell by 3.3 cents a litre to 149.3 c/l in the week to August 3. The slide in prices reflects an easing towards the trough in the discounting cycle that exists in southern and eastern capital cities. The metropolitan price fell by 4.5 cents to 146.6 c/l, while the regional average price fell by 1.2 cent to 154.6 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 4.9 cents to 143.9 c/l), Melbourne (down by 5.8 cents to 143.5 c/l), Brisbane (down by 7.9 cents to 145.7 c/l), Adelaide (up by 2.3 cents to 152.9 c/l), Perth (down by 1.7 cents to 150.8 c/l), Darwin (unchanged at 173.0 c/l), Canberra (down 0.8 c/l to 155.8 c/l) and Hobart (down 0.2 c/l to 160.5 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 139.9 c/l, down around 2.8 cents over the week and the lowest level in eight months.
• Last week the key Singapore gasoline price fell by US$3.35 or 2.9 per cent to an 8-month low of US$113.35 a barrel. In Australian dollar terms the Singapore gasoline price fell by $2 a barrel or 1.6 per cent last week to $109.95 a barrel or 76.70 cents a litre – also the lowest levels in 8½-months.
• Figures from MotorMouth show that petrol prices in Sydney, Melbourne, Brisbane, and Adelaide are still trending lower and have been sliding for an extended 21 days. Normally the cycle tends to last around 12-14 days, however the ongoing slide in global oil prices have allowed retailers to pass on further savings to motorists.

Inflation gauge

• The monthly inflation gauge rose by 0.2 per cent in July after a flat result in June. The annual rate of inflation fell from 3.0 per cent to 2.6 per cent.
• The underlying rate (trimmed mean) rose by 0.4 per cent in July. The annual rate fell from 3.0 per cent to 2.6 per cent.
• Excluding volatile items like petrol and fruit & vegetables, the inflation gauge fell by 0.1 per cent in July after a 0.1 rise in June. The annual rate of inflation fell from 2.5 per cent to 1.9 per cent.
• TD Securities noted that “Contributing to the overall change in July were seasonal price rises for gas and other household fuels (+5.0 per cent), property rates and charges (+3.4 per cent) and electricity (+1.7 per cent). These were offset by falls in water and sewerage (-13.0 per cent), clothing and footwear (-4.1 per cent), and alcohol and tobacco (-0.2 per cent). The price fall in “water and sewerage” was due to a rebate of $100 and a fall in water usage charge in Victoria.”

Job Advertisements

• Job advertisements rose by 0.3 per cent in July after a 4.4 per cent rise in June. Newspaper advertisements fell by 2.8 per cent in the month, however internet ads rose by 0.4 per cent. Job ads were up 4.2 per cent on a year ago. In trend terms, ads rose by 0.1 per cent, the ninth straight gain.
• The Bureau of Statistics’ Retail trade publication contains the most current readings on the performance of consumer spending. The ABS surveys 500 ‘larger businesses’ and 2,750 ‘smaller businesses’. Retail trade covers spending at a broad range of retail outlets but excludes both petrol and motor vehicle sales. A weak retail trade result may point to a slowing economy as well weighing on the share prices of listed retail stocks. But retail trade estimates can’t be assessed in isolation – it is important to look at the influences determining future trends in consumer spending, such as income, employment and confidence levels.
• The TD Securities/Melbourne Institute Monthly Inflation Gauge is designed to “provide a timely and accurate monthly measure of inflation in Australia”. The Bureau of Statistics only releases the Consumer Price Index on a quarterly basis.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.
• The Reserve Bank would be heartened by the recent lift in consumer confidence and resulting rebound in retail activity. Housing activity is no doubt supporting the overall lift in spending and will continue to absorb the weakness in mining investment.
• Overall the economy is on a solid footing and remains fundamentally sound. Given the low interest rate environment, rising share markets and the lift in home prices, the Reserve Bank is likely to be watching for an improvement in labour market conditions. We expect the Reserve to maintain a neutral stance, while keeping a close eye on the transition of growth from mining investment to other parts of the economy. The fiscal drag and uncomfortably high Aussie dollar will keep rates on hold over the next few months.

What is the importance of the economic data?

• The Bureau of Statistics’ Retail trade publication contains the most current readings on the performance of consumer spending. The ABS surveys 500 ‘larger businesses’ and 2,750 ‘smaller businesses’. Retail trade covers spending at a broad range of retail outlets but excludes both petrol and motor vehicle sales. A weak retail trade result may point to a slowing economy as well weighing on the share prices of listed retail stocks. But retail trade estimates can’t be assessed in isolation – it is important to look at the influences determining future trends in consumer spending, such as income, employment and confidence levels.
• The TD Securities/Melbourne Institute Monthly Inflation Gauge is designed to “provide a timely and accurate monthly measure of inflation in Australia”. The Bureau of Statistics only releases the Consumer Price Index on a quarterly basis.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
•  The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.

What are the implications for interest rates and investors?

• The Reserve Bank would be heartened by the recent lift in consumer confidence and resulting rebound in retail activity. Housing activity is no doubt supporting the overall lift in spending and will continue to absorb the weakness in mining investment.
• Overall the economy is on a solid footing and remains fundamentally sound. Given the low interest rate environment, rising share markets and the lift in home prices, the Reserve Bank is likely to be watching for an improvement in labour market conditions. We expect the Reserve to maintain a neutral stance, while keeping a close eye on the transition of growth from mining investment to other parts of the economy. The fiscal drag and uncomfortably high Aussie dollar will keep rates on hold over the next few months.

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• Petrol prices drop: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 4.0 cents per litre to 151.3 cents a litre in the week to July 6. The national average petrol price has traded between 149-158 cents over 2014.
• Discounting cycle: Petrol prices in Sydney, Melbourne, Brisbane, and Adelaide peaked well over two weeks ago and are at present at the low point in the cycle. Prices should lift over the coming days and peak towards the end of this week.
• Business conditions and confidence: The NAB business confidence index rose from +7.3 points to +7.9 points in June. The business conditions index rose from -0.8 points to +2.3 points. The survey was conducted from June 24 to June 30.
• Consumer confidence stabilises: The weekly ANZ/Roy Morgan consumer confidence rating fell by 0.3 per cent in the week to July 6 but was still up by 1.8 per cent over the month and up 5.8 per cent on the lows recorded in late May.

The NAB business survey has components that track broader economic variables such as employment, exports and consumer spending. Businesses can benchmark their experiences against industry and state results. The petrol figures and consumer sentiment data have implications for retailers, especially petrol marketing groups.

What does it all mean?

• Over the past couple of months the business sector has been a lot more upbeat than consumers on the outlook and now conditions are also showing signs of improving. This is in stark contrast to the slide that was noted in consumer confidence in the past couple of months. Business confidence has actually edged up slightly over the past month. And now with the Budget retreating from media headlines, greater focus can be placed on Australia’s good economic circumstances.
• Even consumer confidence is showing signs of having bottomed out. And as the lift in house prices and share markets come to the fore, more Aussies are likely to realise that the economy is in solid shape and interest rates are going nowhere. And more confident consumers should lead to better operating conditions for businesses.
• Encouragingly inflationary pressures are benign with businesses actually noting that labour costs and purchase costs eased in June.
• Overall, the Australian Reserve Bank is in a similar position to the US Federal Reserve. There is no pressing need at present to be tightening monetary policy. But the Australian economy is forming a solid base for future growth and therefore a base for more “normal” interest rates.
• The national petrol price has lost relevance as an indicator of petrol price trends due to the vagaries of the discounting cycle. One week the price is up 4-5 cents, the next week it’s down 4-5 cents. In just the past three weeks petrol price has swung through a 15-17 cent range across Sydney, Brisbane and Melbourne.
• The good news for motorists is that the national average fuel price fell to the low $1.50s a litre last week. The slide in the national price was largely due to the discounting cycle. In Sydney, Melbourne, Brisbane and Adelaide, petrol prices are currently at the low point in the cycle. In fact petrol is trading near wholesale prices at Sydney, Melbourne and Adelaide pumps. Prices are likely to drift higher with the peak in the cycle likely to be later this week.
• Global oil prices are edging lower, reflecting the recent improvement in the geo-political situation in the Middle East. Last week, Libyan export capacity lifted by around 500,000 barrels per day as rebels blockading eastern oil ports agreed to reopen the remaining two terminals. No doubt the Middle East political situation and the volatility of the Australian dollar will be driving factors that determine pump prices in coming months.

What do the figures show?

National Australia Bank Business Survey:

• The NAB business confidence index rose from +7.3 points to +7.9 points in June. The business conditions index improved from -0.8 points to +2.3 points.
• The index of trading conditions strengthened from +1.5 points to +6.6 points; employment weakened from -0.1 points to -2.6 points; profitability strengthened from -2.6 points to +3.1 points; forward orders improved from 0.0 points to +0.4 points.
• Inflationary pressures were largely flat in June. The monthly reading of labour costs rose at a 0.6 per cent quarterly rate in June after a 0.7 per cent rise in May. Purchase costs rose at a 0.3 per cent quarterly rate in June, after a 0.4 per cent rise in May. Final product prices rose by 0.1 per cent after a 0.1 per cent rise in May. Retail prices lifted 0.2 per cent in June, after a flat result in May.
• Capacity utilisation eased from 80.2 to 79.3 in June, below the long-term average of 81.2 per cent.
• The proportion of firms reporting that they did not require credit rose from around 45 per cent in May to around 65 per cent in June.

Petrol prices

• According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 4.0 cents a litre to 151.3 c/l in the week to July 6. The metropolitan price fell by 5.5 c/l to 149.1 c/l, while the regional average price fell by 0.6 cents per litre to 156.0 c/l.
• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 8.2 cents to 147.5 c/l), Melbourne (down by 5.7 cents to 147.0 c/l), Brisbane (down by 7.4 cents to 149.4 c/l), Adelaide (down by 5.8 cents to 145.9 c/l), Perth (up by 1.2 cents to 154.0 c/l), Darwin (unchanged at 173.0 c/l), Canberra (unchanged at 157.2 c/l) and Hobart (up by 0.2 cents to 160.9 c/l).
• Today, the national average wholesale (terminal gate) unleaded petrol price stands 143.0 c/l, down around 1.6 cents over the week. Petrol is trading near wholesale prices at Sydney, Melbourne and Adelaide pumps.
• Last week the key Singapore gasoline price fell by US$1.60 or 1.2 per cent to US$127 a barrel. Yesterday the Singapore gasoline price fell further to a 3-week low of US$125.10 a barrel. In Australian dollar terms the Singapore gasoline price fell by 66c a barrel or 0.5 per cent last week to $123.19 a barrel or 85.29 cents a litre.
• Figures from MotorMouth show that petrol prices in Sydney, Melbourne, Brisbane, and Adelaide peaked well over two weeks ago and are at present at the low point in the cycle. Prices should lift over the coming days and peak towards the end of this week.

Consumer sentiment:

• The ANZ/Roy Morgan consumer confidence rating fell by 0.3 per cent in the week to July 6 after falling 0.3 per cent in the previous week and lifting by 2.4 per cent in the week to June 22. Over the month, confidence rose by 1.8 per cent. The confidence rating is up 5.8 per cent on the lows recorded for the week to May 25.
• The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes.
• The monthly National Australia Bank business survey is valuable in providing a timely reading on the health of Corporate Australia. Key indicators of business conditions such as orders, employment, profitability and capacity use are covered together with a gauge on confidence levels.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
• Business confidence and conditions are good without being great. Smart companies are looking for opportunities in the current environment but there are still plenty of risk-averse businesses on the sidelines. Exports and housing construction are the key drivers of the Australian economy.
• The Reserve Bank doesn’t need to be in a rush to lift interest rates. Inflation remains well contained, while the higher Aussie dollar continues to hamper rebalancing efforts across the economy.

What is the importance of the economic data?

• The monthly National Australia Bank business survey is valuable in providing a timely reading on the health of Corporate Australia. Key indicators of business conditions such as orders, employment, profitability and capacity use are covered together with a gauge on confidence levels.
• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications for interest rates and investors?

• Business confidence and conditions are good without being great. Smart companies are looking for opportunities in the current environment but there are still plenty of risk-averse businesses on the sidelines. Exports and housing construction are the key drivers of the Australian economy.
• The Reserve Bank doesn’t need to be in a rush to lift interest rates. Inflation remains well contained, while the higher Aussie dollar continues to hamper rebalancing efforts across the economy.

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Weekly Petrol Prices

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  Petrol prices drop

  Petrol prices drop: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 1.8 cents per litre to 149.9 cents a litre in the week to June 15. The petrol price has broadly trended sideways over 2014.

• Wholesale prices: Wholesale petrol prices are still falling in Australia, hitting a 21-day low of 141.85 cents a litre today.
• World prices: The Singapore gasoline price rose by US$3.15 or 2.6 per cent last week. But in Australian dollar terms, gasoline rose by a smaller $2.17 a barrel or 1.7 per cent, courtesy of a stronger Aussie dollar.

What does it all mean?

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Latest economic data; Chinese inflation; Weekly Petrol

• The number of new owner-occupier housing loans was largely unchanged in April but the share of first-time buyers in the market equalled the record low at 12.3 per cent of all loans. The value of investor home loans rose by 2.3 per cent to a record $11 billion in April.
• Business conditions and confidence: The NAB business confidence index rose from +6.5 points to +6.9 points in May. The business conditions index eased from +0.2 points to -0.7 points. The survey was conducted from May 26 to June 3.
• Petrol prices drop: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 4.0 cents per litre to 151.7 cents a litre in the week to June 6. The petrol price has trended sideways over 2014.
• Hiring slips: Job advertisements fell by 5.6 per cent in May – the first fall in five months.
• Tame Chinese inflation: Producer prices fell by 1.4 per cent in the year to May (median forecast was for a 1.5 per cent decline). Consumer prices rose by 2.5 per cent over the year (median forecast 2.4 per cent).

What does it all mean?

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Weekly petrol prices

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  Petrol prices drop.

  Petrol price fall: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 0.7 cents per litre to 149.5 cents a litre in the week to May 25 – only the second time in six months that the national average price has fallen below $1.50 a litre.

• Petrol prices troughed midway through last week across the Eastern Seaboard (the low point in the cycle). Prices have since drifted higher and are likely to hit the high point in the cycle over the coming days.
• Yesterday, the national average wholesale (terminal gate) unleaded petrol price stands at 143.0 c/l, up around 1.6 cents over the week.

What does it all mean?

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Dwelling approvals; TD Inflation Gauge; New Car Sales; Weekly petrol prices

• Dwelling approvals consolidate: Dwelling approvals fell by 3.5 per cent in March. Approvals are still up 20 per cent over the year. The current number of dwelling approvals (15,958) is well above the decade average (13,489).
• House approvals are up 19.1 per cent over the past year while apartment approvals are up 21.3 per cent.
• Inflation contained: The TD Securities-Melbourne Institute monthly inflation gauge rose by 0.4 per cent in April to stand 2.8 per cent higher than a year ago.
• Petrol prices ease: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 1.4 cents per litre to 150.2 cents a litre in the week to May 4.
• Regional price slide: In Australian dollar terms the Singapore gasoline price fell by US$4.82 last week to $128.06 a barrel. Petrol prices are at the peak (high point) in the discounting cycle and should ease over the next fortnight.
• Car sales dip but record SUVs. New car sales fell by 5.2 per cent over the year to April. Over the year a record 334,385 new sports utility vehicles (SUVs or 4WDs) were sold.

What does it all mean?

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