The Australian share market traded up on Thursday as jobs data was released showing the unemployment rate was steady at 3.5 per cent. See how the day played out on the ABC News markets blog.
Disclaimer: this blog is not intended as investment advice.
Key events
Live updates
Here's where we ended up at 4:30pm AEDT
By Emilia Terzon
- ASX 200: +0.6pc to 7,435
- All Ords: +0.5pc to 7,648
- Aussie dollar: 68.96 US cents
- On Wall Street: Dow -1.8pc, S&P 500 -1.6pc, Nasdaq -1.2pc
- In Europe: Stoxx 600 +0.2pc, FTSE -0.3pc, DAX is flat
- Spot gold: -0.3ppc at $US1,903 an ounce
- Brent crude: -1.3pc at $US84.68 a barrel
- Bitcoin: -2.7pc to $US20,766
Australians shares bounce higher against Wall Street
By Emilia Terzon
It's been a counterituitive day on the ASX, unless you're watching closely.
Wall Street had some of its biggest losses in weeks and the ASX was shaping up for a bad day, but it's ended up 0.6 per cent.
The jobs data showing the start of a potential slowdown had brokers and traders contemplating an easing off in rate hikes by the RBA (although not all are convinced it will do this).
Simultaneously, we saw energy and tech stocks follow the pessimism on Wall Street. Check out the big losers below including Paladin, Karoon and Lake.
Overall, we saw 7 of the 11 sectors end up.
That's all from me today! Tomorrow you'll be joined again by dream team ABC News business reporters Michael Janda and Steph Chalmers.
Jacinda Arden leaves behind a NZ economy facing crisis
By Emilia Terzon
With the Kiwi prime minister shocking the world with the news she's standing down as leader, we thought it was time for an economic spotlight on New Zealand.
Like many, the country's economy has been dealing with the fallout of the pandemic and surging inflation.
Political analysts had earlier predicted that the 2023 elections would be a very close election, which would mainly be focused on the economy, inflation and equality.
Just today, it's official data agency announced annual food prices had spiked at their highest rate since 1990!
Food costs went up by more than 11 per cent in a year. The big drivers, like in Australia, have been grocery prices, eating out and a whopping 23 per cent spike in fruit and vegies.
Aside from the rising cost of living, you have New Zealand's property market woes. It had a huge spike like we did here in Australia and now it's experiencing a fallout.
The latest property data, out just yesterday, showed it's property prices were down 12.1% to in the year to December, according to REINZ.
New Zealand's central bank has been lifting its official cash rate higher and sooner than here in Australia. It's currently at 4.25 per cent and some project it'll hit 5.5 per cent this year.
All of this is causing a lot of pain for some households in New Zealand, especially in an economy with a traditionally higher cost of living than Australia anyways.
Jacinda Arden says she doesn't have enough fuel in the tank for another year as Prime Minister. If she did, she would've needed quite a lot of it, as New Zealand is set for a tough year.
Read more about her exit here (and why it is not a shock to some watching closely) in this piece by ABC News reporter Emily Clark.
Interest rate risk heightens with CPI projections: ANZ
By Emilia Terzon
ANZ has revised its projections of CPI upwards.
We spoke to ANZ economist Adelaide Timbrell just last week when the ABS' monthly inflation data for November came out.
She noted then that price spikes weren't easing as quickly as anticipated, and that this increased the risk of rate hikes.
She was already expecting that December will show more inflation, as it's when we're expecting electricity bills to hit.
Now her colleague Catherine Birch has put out a note for ANZ estimating that CPI will go up 0.1 per cent higher than expected.
"This would see the annual rate reach 6.7%, exceeding the RBA’s forecast of 6.5% y/y," the note reads.
"We forecast non-tradable and services inflation will both print at 1.9% q/q, annualising at almost 8%.
"This would be the largest quarterly increase for services inflation since the mid-1990s, aside from temporary policy influences around the GST’s introduction and during the pandemic."
The note also adds that the risks of the cash rate going up to 3.85 per cent are growing.
The CPI quarterly data comes out on Wednesday.
See this graph:
Not much of a suprise in jobs data: ANZ
By Emilia Terzon
Here's some more on the jobs data with senior ANZ economist Catherine Birch speaking to ABC News.
Turning point in unemployment pushes up ASX
By Emilia Terzon
After opening a bit down, the ASX is now bucking Wall Street's downer to trade up in early lunchtime trade.
If you look at the index's trajectory, it went up sharply just after the unemployment rate data was released at 11:30am AEDT.
The unemployment rate for December came in higher than some economists were predicting at 3.5 per cent.
It was after 14,600 jobs were lost and fewer people were looking for work overall. It might have been higher if not for that last bit.
The turn in the unemployment rate from it's low of 3.4 per cent may be a sign that the economy is at a turning point.
And that may mean the Reserve Bank won't hike rates as high as previously thought.
At least that appears to be the bond market's hot take, with the yield on the 1 year Australian bond trading down today by about 0.1 per cent to 3.1 per cent.
The share market also appears to be reacting this way.
However, our business reporter Alicia Barry was just chatting with economist BIS Oxford Economics Sean Langcake on ABC News and he doesn't see the data impacting the RBA's expected moves in the short-term.
"I don't think the movements in these numbers are really large enough to change their considerations for the February meeting," he says.
"Employment growth is still tracking up and the labour market is still in a tight position.
"I expect the RBA to go up by another 0.25 per cent in February."
And of course, the RBA has next week's inflation data to take into consideration next week, too.
Here's where we're at at 12pm AEDT
By Emilia Terzon
- ASX 200: +0.3pc to 7,413
- All Ords: +0.2pc to 7,625
- Aussie dollar: 69.35 US cents
- On Wall Street: Dow -1.8pc, S&P 500 -1.6pc, Nasdaq -1.2pc
- In Europe: Stoxx 600 +0.2pc, FTSE -0.3pc, DAX is flat
- Spot gold: -0.3ppc at $US1,903 an ounce
- Brent crude: -1.3pc at $US84.68 a barrel
- Bitcoin: -2.7pc to $US20,766
Unemployment rate holds in December (with a proviso)
By Emilia Terzon
ABS data shows the unemployment rate was at 3.5 per cent in December.
Now, that's actually a slight increase on what we thought it was in November at 3.4 per cent.
However, the ABS has revised up its November figure to 3.5 per cent as well, meaning December was left unchanged.
Regardless of how you spin this, it does mean the economy has lost more jobs than we originally thought.
The unemployment rate sitting at 3.5 per cent was on the back of an estimated 14,600 jobs being lost in December.
The loss of those jobs came as we saw other signs at the end of 2022 in fewer job adverts and vacancies.
We'll be updating this ABC News story as it comes in:
ASX opens marginally lower on Thursday
By Emilia Terzon
The ASX 200 shaved off about 0.1 per cent on open.
That's a lot better than the losses on Wall Street, where the major indexs dropped by more than 1 per cent each.
As noted by NAB this morning, Wall Street is down as tech lay offs at Microsoft add to concerns about a recession and retail spend data there continues a downward trend.
"The weak data has supported a US recession view in 2023, pushing back on the soft landing narrative that has pervaded markets since the beginning of the year," NAB notes.
The biggest losers on open included energy and mining stocks. While the gains were being seen by a mixed bags, including a few retail stocks Lovia and Vicinity.
Here's the top movers and shakers.
What we're expecting in the jobs data today
By Emilia Terzon
The ABS is releasing monthly jobs data at 11:30am AEDT.
Despite talk of a cooldown, economists are tipping the data will show another 25,000 jobs were added to the economy in December.
This would lead to a steady unemployment rate of 3.4 per cent.
Our business reporters Sue Lannin and Michael Janda will be staying across this story today and we'll update you here.
Here's where we were sitting as of November's data.
Could more property investors solve the rental crisis?
By Emilia Terzon
Sounds like a real estate agent plug, doesn't it?
But a piece by ABC News reporter Emily Sakzewski has some interesting arguements by academics about how the mass sale of properties to owner occupiers during the pandemic boom had the side effect of taking rentals out of the market.
As they argue, this has helped tighten supply and push up prices further.
However, not everybody thinks it is this simple, including our very own Michael Janda at ABC News.
We're seeing some interesting trends in the rental market nationally right now, as regional migration trends ease and the big capital cities wait for migrants and office workers to return.
You can read the full story here:
More on the tech-layoffs at Microsoft
By Emilia Terzon
Microsoft is laying off 10,000 people globally.
It's CEO made the announcement in a staff memo that you can read here.
Here's Satya Nadella's major rationale for the job losses:
First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.
We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.
At the same time, the next major wave of computing is being born with advances in AI, as we’re turning the world’s most advanced models into a new computing platform.
The losses amount to 5 per cent of the tech company's workforce globally and follow lay-off by other tech companies including Salesforce and Alphabet.
The tech-laden Nasdaq in the US is down more than 6 per cent in the last six months after it's boom times during COVID.
This is how we're looking at 10:30am AEDT
By Emilia Terzon
- ASX 200: -0.2pc to 7,382
- All Ords: -0.2pc to 7,595
- Aussie dollar: 69.35 US cents
- On Wall Street: Dow -1.8pc, S&P 500 -1.6pc, Nasdaq -1.2pc
- In Europe: Stoxx 600 +0.2pc, FTSE -0.3pc, DAX is flat
- Spot gold: -0.3ppc at $US1,903 an ounce
- Brent crude: -1.3pc at $US84.68 a barrel
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Bitcoin: -2.7pc to $US20,766
ASX to open lower as global markets bounce around
By Emilia Terzon
Good morning!
ABC business reporter Emilia Terzon here back on my first markets blogging shift after Summer holidays.
I hope I remember what a currency is beyond something with which to buy wine.
This morning we're expecting the ASX to open lower after US markets pulled back from a recent rally.
There's concerns on Wall Street about job losses and, as seems to be the constant theme, potentially more rate hikes by the Fed.
However, European markets have fared better.
That is as inflation data in the UK shows price hikes there are easing. The UK's CPI was still at 10.5 per cent for December, though. Ouch.
Grab a cup of coffee (or a wine if you're still in Summer mode) and we'll be back soon with more data.
