What grabbed the headlines last week?

US inflation

US inflation has cooled down for the sixth straight month in December.

The headline CPI index fell from 7.1% to 6.5% as energy prices tumbled,  with gasoline prices falling 9.4% on a monthly basis, a decline of 1.5% from a year ago.

“As inflation in the world’s largest economy is, it seems, being brought under control thanks to the Federal Reserve’s aggressive interest rate hikes, it makes it more likely that the central bank will begin to take its foot off the brake of the economy by slowing the hikes,” said deVere Group CEO, Nigel Green.

Green however believes the Fed will continue hiking rates for a while yet (albeit at a slower pace) as they can’t afford to slide backwards.

“Officials will continue to sound hawkish in order to avoid over-excitement in the markets and wider complacency,” he said.


US jobs

Another set of of released data that had bolstered the case for a more dovish Fed stance was the US jobs numbers.

The hot non-farm payroll numbers continued to rise, adding another 235,000 jobs for the week,

US unemployment also declined to the lowest level since the 1960s to 3.5%.

However, the all important average hourly earnings came in softer than expected.

“From the market’s perspective, the main thing they’re responding to is the softer average hourly earnings number,” said market strategist at MetLife Investment, Drew Matus,

“The unemployment rate doesn’t matter much if average hourly earnings continue to soften.”

Source: Economicoutlook.net


Australian inflation at 32-year high

Meanwhile, the ABS said that Australia’s inflation rose again in November to 7.3% (year on year) to a 32-year high.

This was up from October’s rise of 6.9%.

The prices of food and non-alcoholic beverages jumped 9%, while fruit and vegetables and travel costs softened. Transportation costs rose 16.6% from 11.85% a month earlier.

The larger than expected inflation figure (forecast was 7%) and strong retail sales has dashed hopes the RBA could soften its rate hike stance in February.

After the release, money market futures jumped as traders firmed up a 25bp RBA hike in February.

According to Morningstar, some $370bn of fixed rate mortgage loans have started to roll off, and the refinancing process will accelerate through 2023.

“Most refinancing will see repayments increase significantly, absorbing over 40% of household disposable income,” said Peter Warnes, Head of Equities Research at Morningstar Australasia.

“That will alter household consumption patterns meaningfully,” he added.


The Economic Calendar

Monday January 16th – Friday January 20th


All sources from Commsec and Investing.com

In Australia, the jobs data on Wednesday will be the main focus for investors.

Overseas, China will release the crucial GDP data on Tuesday.

The US will report a slew of important data on Wednesday (US time), including the PPI (producer price index).

In Europe, the Eurozone’s inflation will also be released on Wednesday (EU time)


Australia and New Zealand

Monthly inflation gauge

Monthly consumer confidence/Weekly consumer confidence

Weekly payroll jobs and wages

Labour force

Business turnover


China economic growth
China monthly dat
US Empire State factory index
EU economic sentiment

US Federal Reserve Beige Book
US producer price index
US industrial production
US NAHB housing market index
EU inflation

US housing starts
US Philadelphia Federal Reserve index
EU current account
EU monetary policy meeting minutes

US existing home sales


The ASX IPO calendar for this week

Dates are from the ASX, and they could change at short or without notice.


Listing: 16 January

IPO: $7m at $0.20

The specialist metals suppliers are one of the UK’s largest independent stockists of aerospace high-grade metals supplying materials to many industry sectors across the UK, mainland Europe and globally.

In addition to cutting and supplying from their extensive stock of titanium, stainless steels, nickel alloys, alloy steels and aluminium, the company have the necessary relationships to enable us to source more exotic ‘hard to find’ metals and the equipment and skills to process them on site – plus there’s no minimum order quantities required.


Listing: January 17th

IPO: $8m at $0.20

Not related to the band, ACDC Metals has entered into binding agreements to acquire interests in the Goschen Central, Douglas and Watchem projects on the edge of Victoria’s Murray Basin.

All are considered prospective for heavy mineral sands, rare earth elements and other materials.

The potential point of difference is ACDC has entered into a licensing agreement with major shareholder TSXV-listed Medallion Resources to use its proprietary monazite processing technology to extract rare earths from monazite.

That is the style on mineralisation that will initially be processed by Iluka Resources (ASX:ILU) at its Eneabba refinery.


Listing: 20 January

IPO: $5.5m at $0.20

On listing, the company will acquire the Werner Lake Cobalt Project in north-western Ontario, within the Kenora Mining District.

Initial plans include reviewing the existing exploration and geological data, drill targets not previously drilled and establish new drill targets at the Project. 

New drill targets will then be established using electromagnetic techniques to consider targets outside of the existing orebody, after which an RC and/or diamond drilling program will be conducted.