“While there are special factors, including concert tours, the Ashes and the increasingly lengthy Black Friday sales period, which continues to transfer December spending into November, the result will add to the RBA’s concerns that currently above-target inflation will not moderate as forecast given some underlying strengthening in the economy appears to be under way,” he said.
Insurance giant Suncorp said in a statement that its costs from natural disasters were expected to be $1.32 billion for the first half, which is more than half its full-year natural hazard allowance of $1.77 billion. Suncorp shares were down 2.2 per cent. The big four banks all climbed.
Gold miners were stronger; among them, Newmont gained 5.8 per cent. However, iron ore heavyweights BHP (down 2.5 per cent), Fortescue (down 1.4 per cent) and Rio Tinto (down 0.4 per cent) were all weaker.
Utilities (down 1.8 per cent) was the only other sector in the red, losing 1.8 per cent as shares in Origin Energy (down 1.6 per cent), Meridian Energy (down 0.8 per cent) and APA Group (down 2.3 per cent) all slipped.
On Friday, Wall Street hit a record following a mixed report on the US job market, one that may delay another cut to interest rates by the Federal Reserve but does not slam the door on it.
The S&P 500 climbed 0.6 per cent on Friday (US time) and topped its prior all-time high set earlier in the week. The Dow Jones Industrial Average added 237 points, or 0.5 per cent, and likewise set a record, while the Nasdaq composite led the market with a 0.8 per cent gain.
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The moves came after the US Labor Department said employers had hired fewer workers during December than economists expected, though the unemployment rate improved and was better than expected. It reinforced how the US job market may be in a “low-hire, low-fire” state and might avoid a recession.
Federal Reserve chair Jerome Powell on Sunday (US time) said the Department of Justice had served the central bank with subpoenas.
The threat of a criminal indictment over Powell’s testimony about the Fed’s building renovations is the latest escalation in US President Donald Trump’s feud with the Fed. Trump has criticised the Fed’s $US2.5 billion renovation of two office buildings as excessive.
Powell’s term as chair ends in May, and Trump administration officials have signalled that the president could name a potential replacement this month. Trump has also sought to fire Fed governor Lisa Cook.
In a brief interview with NBC News Sunday, Trump said he didn’t know about the investigation into Powell. When asked if the investigation was intended to pressure Powell on rates, Trump said, “No. I wouldn’t even think of doing it that way.”
Friday’s improvement in the US unemployment rate was enough to get traders to ratchet back expectations for a cut to interest rates at the Fed’s next meeting, which is scheduled for later this month. Traders are now forecasting just a 5 per cent chance of that, down from 11 per cent a day before, according to data from CME Group.
But traders nevertheless still largely expect the Fed to cut rates at least twice this upcoming year.
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