29-11-2022
In a surprising and unprecedented statement at a Senate Estimates Committee meeting yesterday, RBA governor Lowe apologised for forecasting in 2021 that they did not expect the cash rate to go up until 2024. Instead, the RBA has raised rates seven months in a row this year to tame the rising cost of living. He also emphasised that the recent federal budget has not impacted the RBA’s monetary policy.
The RBA will meet for the final time in 2022 next Tuesday before they adjourn until February 2023. The consensus is that they will raise rates by another 25 basis points to 3.1%. A 25 basis point rise will mean that the cash rate has risen by 3% from 0.1% this year, making it the most aggressive monetary policy since the establishment of a 2-3% inflation rate target.
Australian retail sales fell 0.2% in October, well below the 0.5% rise forecasted. This is another economic indicator confirming the impacts of the RBA’s monetary policy on household consumption.
In the US, markets had a shortened week of trading due to Thanksgiving, with all three major indexes rising. Of note were the Federal Reserve Minutes released last week, which revealed that a “substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.” The final US Federal Reserve rate decision of the year is on December 13th and 14th.
Covid lockdowns and protests were ignited in China towards the end of last week as the CCP maintain their zero-covid policy. The prospect of a weaker Chinese economy has driven oil prices to their lowest level since 2021, despite Saudi Arabia’s commitment to oil supply cuts with the OPEC+ nations.
Looking ahead this week there’s a swathe of market-moving economic indicators due to be released. At home, we have private sector credit data, October CPI, Manufacturing/Services PMI, Home Loan data and another Governor Lowe speech. Stateside, there’s November labour market data, GDP growth and consumption data. Finally, the Eurozone November inflation rate is due to be released on Wednesday.
Don’t have the Raiz App?
Download it for free in the App store or the Webapp below:
Important Information
If you have read all or any part of our email, website, or communication then you need to know that this is factual information and general advice only. This means it does not consider any person’s particular financial objectives, financial situation, or financial needs. If you are an investor, you should consult a licensed adviser before acting on any information to fully understand the benefits and risk associated with the product. This is your call but that is what you should do.
You may be surprised to learn that RAIZ Invest Australia Limited (ABN 26 604 402 815) (Raiz), an authorised representative AFSL 434776 prepared this information.
We are not allowed, and have not prepared this information to offer financial product advice or a recommendation in relation to any investments or securities. If we did give you personal advice, which we did not, then the use of the Raiz App would be a lot more expensive than the current pricing – sorry but true. You therefore should not rely on this information to make investment decisions, because it was not about you for once, and unfortunately, we cannot advise you on who or what you can rely on – again sorry.
A Product Disclosure Statement (PDS) for Raiz Invest and/or Raiz Invest Super is available on the Raiz Invest website and App. A person must read and consider the PDS before deciding whether, or not, to acquire and/or continue to hold interests in the financial product. We know and ASIC research shows that you probably won’t, but we want you to, and we encourage you to read the PDS so you know exactly what the product does, its risks and costs. If you don’t read the PDS, it’s a bit like flying blind. Probably not a good idea.
The risks and fees for investing are fully set out in the PDS and include the risks that would ordinarily apply to investing. You should note, as illustrated by the global financial crisis of 2008, that sometimes not even professionals in the financial services sector understand the ordinary risks of investing – because by their nature many risks are unknown – but you still need to give it a go and try to understand the risks set out in the PDS.
Any returns shown or implied are not forecasts and are not reliable guides or predictors of future performance. Those of you who cannot afford financial advice may be considering ignoring this statement, but please don’t, it is so true.
Under no circumstance is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.
This information may be based on assumptions or market conditions which change without notice and have not been independently verified. Basically, this says nothing stays the same for long in financial markets (or even in life for that matter) and we are sorry. We try, but we can’t promise that the information is accurate, or stays accurate.
Any opinions or information expressed are subject to change without notice; that’s just the way we roll.
Home loans are subject to approval from the lending institution and Raiz Home Ownership makes no warranties as to the success of an application until all relevant information has been provided.
Raiz Home Ownership Pty Ltd (ABN 14 645 876 937), an Australian Credit Representative number 528594 under Australian Credit Licence number 387025. Raiz Home Ownership Pty Ltd is 100% owned by Raiz Invest Australia Limited (ABN 26 604 402 815).
