Key Data for the Week
Key economic data released this week:
The Australian market closed lower yesterday, with the ASX 200 falling 0.8% to 5,707, with banks leading the decline.
The big banks lost between 1.3% and 1.9%, with ANZ the worst performer yesterday. The banks have been under pressure since the start of the month, with the Budget's bank levy weighing on the majors.
Industrials were the only sector to post a gain, with the sector adding 0.7%, led by Sydney Airport as it firmed 2.43%. Brambles closed up 1.15% and Transurban finished 0.9% higher.
Wesfarmers Limited (WES) announced group CFO, Anthony Gianotti, will step down later this year after nine years in the role. He will be replaced by current finance director Terry Bowen. WES declined 0.2%, to close at $42.55.
Pizza giant Domino’s (DMP) fell $2.36, or 3.8%, yesterday, to close at $59.19 in a volatile day of trade. The move came after Morgans stockbrokers downgraded the stock. DMP is down 9% since the start of 2017.
The Australian futures market points to a 0.07% fall today.
It was a quiet night of trading given holidays in the US and UK. There was little movement in most asset classes as a result. The only major move came on Italian markets, which were dragged lower by ongoing concerns over Italian banks and political uncertainty, with talk of an early Italian election.
Guidance on the RBA’s direction on Australian interest rates can be found in Europe.
While the Euro area is showing its strongest economic growth in a decade, lowest unemployment since 2009 and Germany, the euro area’s economic powerhouse, recording business sentiment at its highest level since 1991, the European Central Bank still can’t withdraw stimulus and raise interest rates. The reason being, the absence of inflation.
Similar to Australia, and as we noted last week, also the US, an absence of wages growth, even as unemployment falls, is keeping the consumer cautious about over spending and driving inflation up. Technology, more efficient work practices, globalisation and low oil prices are also working together to keep inflation low.
Globally, inflation looks like remaining low for quite some time and, as in the Euro area, Australia will find the lack of inflation a road block to raising interest rates.
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