The Economic Week that Was

Aside from Julian Sands, we’ve largely made it through the first half of 2023.

Well, if you’re reading this you have. Others may not. But with the Nasdaq about to rip open its best first six months of a calender year ever, the blood-letting afeared at the start of the year has been of far less a torrent than many had forecast.

The Australian share market rose around 1.3% over the last week with gains led by Tech stocks, some property names and a US pop singer.

Gregor reports that Ora Gold (ASX:OAU) ended king of the cute caps last week, adding 80% on news of high-grade gold results returned from drilling at the South-Eastern Ore Body (SEB) of its Crown Prince gold prospect.

“Ora kinda flew under the radar a bit this week, which is surprising because the intercepts are thick and shallow, much like an old high-school girlfriend of mine,” he said. And we paid him to say it.

ORA’s intercepts include:

  • 40m @ 17.53g/t Au from 30m incl. 19m @ 36.8g/t Au from 35m in OGGRC488
  • 16m @ 35.77g/t Au from 28m and 3m @ 20.38g/t Au from 10m in OGGRC489
  • 13m @ 21.9g/t Au from 32m and 9m @ 6.22g/t Au from 57m in OGGRC490
  • 12m @ 9.73g/t Au from 6m in OGGRC483
  • 21m @ 2.53g/t Au from surface in OGGRC502 and
  • 25m @ 2.00g/t Au from 3m in OGGRC491

Western Yilgarn (ASX:WYX) added +71% for the week, and in third place is Inoviq (ASX:IIQ) on +68%.

Tech stocks banked a 2.7% gain while Consumer Discretionary jumped 1.7% after the entire nation lost its mind buying Taylor Swift tickets, and taking advantage of the EOFY Speshuls on work-related PlayStations and other tax-deductible office essentials.

Health Care lost -1.3%, with Energy (-1.6%) and Utilities (-1.5%) getting hit ahead of the spine-crushing power bill increases that come into effect today.

Oil (and iron ore prices) nudged bravely higher, although local markets traded on lighter volumes last week. Judging from the frenzy of outflows in the Stockhead newsroom it seems pretty damn certain that the Taylor Swift economy led by the vanguard of ticket hopes diverted inflows.

Apparently more than 4 million tone deaf but cash rich Australians tried to buy Swifty tix to her three Australian shows midweek. About 3.86m of those came from the Stockhead newsroom.

Gregor says there’s good news for beef-eaters, but sadly Bega said there’s less dairy cows in Australia. Apparently there’s almost a 10% drop in the volume of milk produced by Aussie dairy farmers over the past two years. But I can live with high milk prices if my cow flesh costs ease.

Elsewhere across global markets, we saw more evidence of resilient economic behaviour out of The States, which boosted sentiment everywhere, except in China.

China had a bit of a whack from further US promises of AI chip restrictions.

A positive global lead along with lower-than-expected monthly Australian CPI data has defied sceptics. But not as much as what’s happened on Wall Street, where obviously there is a higher ratio of crazy rich people.

Earlier this half we were dealing with a new world of failing banks, recession fears and still the highest borrowing costs in almost 20 years.

Well, apparently history shows that a strong first calendar half usually begets a decent rest of the year, with July ranking as a top month for the S&P 500 as well over the past decade, gaining well over 3% on average.

Monthly CPI and retail trade readings for May 2023 got the eco-geeks out of bed this week.

The monthly CPI was a total handbrake compared to some of the numbers we’ve been slapped with these last months. The Bureau of Numbers says headline inflation in the year to last month, fell from 6.8%  in April to 5.6% in May. CBA puts the retreat down to a much “larger than anticipated fall in travel prices”.

Whether everything else is still the same utter rip-off is the major unknown which is making the RBA’s call on rates next week just as much of a bewildering mystery as the successful cinema of Hugh Grant.

Retail trade turned out real good, which is real bad. Harry Oatley from CBA called the result “punchy”.

Elsewhere, the Euro Central Bank Forum on… Central Banking was apparently rated hawkishly interesting. I’d describe it as four funerals and a burial  –  the ECB, the BoE et al were eulogising remaining hope of a closing cycle, while Fed Chair Jerome Powell just rocked up with a spade and a promise that that monetary policy wants for further and longer restricting.

WEe should mention a little of the Russian instability following the crazy Wagner Group mutiny. Dr Shane Oliver calls the it “ambiguous for investment markets”.

“On the one hand cracks in support for Putin may be seen as good news for Ukraine and ending the war, particularly if Putin is replaced by someone less hardline. But on the other hand by emboldening Ukraine it may delay the end of the war, threats to Putin may see him take desperate actions, even if he is replaced it may be by someone who is even more hardline and instability in Russia could further threaten global commodity supply.”

The Economic Week Ahead

Harry’s team updated their economic and monetary policy forecasts last week, to glumly fit in with the general theme of further monetary tightening and slower growth.


We’ll find out this week, because we’re back on board with the RBA rates decision meeting. That’ll ensure an even bigger week for local property than usual with a towering inferno of housing related releases.

CoreLogic is expecting another solid return to growth in June.  Sydney prices are expected to kick ahead by as much as 1.7%. And why not? It’s a nice city.

The ABS also drops new housing lending, where most analysts expecting a return to form – Team CBA forecast total new lending to rise by 3%.

Building approvals are also due. I don’t know why they persist with this one. It’s an indicator one must premise by saying eh, don’t read much into this – it’s hella volatile. I don’t like it. They should let the ABS take a breather.

But back to the price of money – Dr. P Lowe and his monetary policy wonks could really go either way on Tuesday and remain just as roundly disliked as they were on Monday.

The decision is a line-ball call according to the Bloomberg survey which I also don’t rate. Someone should pay these economists and then dock them every time they get it wrong. That’s a free market function Adam Smith missed.

Anyway –  it looks pretty evenly split between a hold and a further 25 basis points on your mortgage.

“There are clearly strong arguments for either decision, but we favour those supporting the RBA holding rates steady in July,” Harry says.

“In our mind, the RBA has been afforded a month to pause on the back of the slower rate of prices growth evident in the monthly CPI in the context of cooling economic activity. We anticipate one final interest rate hike in August for a terminal rate of 4.35%.”

The sleepless automotons manning the calculators at the ABS also have to have international trade data ready for May.

“The trade surplus will remain large but commodity prices have fallen in May and so it is likely that non-rural exports will decline, dragging the trade surplus down to ~$10bn by our estimate,” Oatley says.

In the US non-farm payrolls will be as gripping as it gets.

Thank you, for once, America.

And quickly back to Swifty. This is what Dr Shane Oliver has to share:


In terms of the potential Taylor Swift lift to the economy and maybe inflation it’s been enhanced by the addition of two more concerts resulting in a total capacity of about 630,000 fans. Taylor’s Australian concerts next February will be a big thing. 

These are big events across consecutive days so there will be a bump in related employment, accommodation demand and demand for transport in and into and out of Sydney and Melbourne. A potential feel-good factor may also help (although this may be offset by the many who missed out on tickets – including me ☹).

There may also be a boost to inflation in February next year via higher travel and accommodation costs (much like the Beyonce blip in Sweden in May). However, any boost to the economy and inflation is likely to be short lived and so the RBA will rightly look through it with no impact on interest rates.

However, by February the economy could be quite depressed as cumulative rate hikes impact so any Taylor Swift lift to help shake it off …even if it’s temporary will be welcome.


The Economic Calendar
Monday July 1 – Friday July 5

All sources from Commsec, Trading Economics, S&P Global Research

CoreLogic Dwelling Prices, June
New housing lending, May
Building approvals, May
MI Inflation Gauge

RBA Board Meeting, June Cash rate target


AU Trade Balance, May


Everyone else

US ISM Manufacturing, Jun
US FOMC Meeting Minutes, Feb
US Composite PMI, Jun
US Construction Spending, May

US Independence Day holiday
US Nonfarm Payrolls
US Unemployment Rate

Caixin China PMI Composite
Caixin China PMI Services
Eurozone Composite PMI Jun
Eurozone Services PMI Jun

US Trade Balance, May,
US Factory Orders
US Durable Goods Orders, May
US FOMC Meeting Minutes
US Fedspeak Williams

Eurozone Retail Sales MoM May
US ADP Employment ChangeJun
US Initial Jobless Claims
US Fedspeak (Logan)