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Australian CPI inflation came in at 2.8% this week on a quarterly basis, but that number was effectively distorted. Lower Brent Crude prices and the impact of Federal energy rebates helped to give us a ‘fake number’ – without rebates and the volatility of automotive fuel, ‘real inflation’ is considerably higher.
That was evident in the Trimmed Mean Inflation (TMI) metric – Australia’s answer to “core inflation” – which was at 3.5% QoQ vs. 3.9% pcp.
Housing remains the biggest driver of inflation upside in Australia; the RBA doesn’t have any magic fix for that and markets are now pushing rate cut bets back to 2H 2025. Exactly where the RBA has been telling us they’ll start cutting rates for the last two years.
That will remain the quo until we get the next seemingly-positive catalyst from the ABS and then rate cut predictions will get over-excited again, sure as the sun is to rise. Bar some shock spike in unemployment, however, the RBA most probably isn’t going to do anything until after July 2025.
So, we got some fresh inflation data this week. Again. The ASX200’s response to the 2.8% CPI read was notable, in that the market lost nearly a percent a few hours after the data was released. Clearly, the market zeitgeist has learned CPI doesn’t really reflect what’s actually going on.
So what else happened this week? A lot of things, but equally true, not much. The entire world is waiting to see what happens next week in the U.S. – the world’s largest economy is currently insisting upon itself when it comes to the national election.
As for how that election is likely to play out, who knows. It’s pretty much 50/50 – democracy wins again.
It was against that backdrop we saw Bitcoin – remember crypto? – hit a fresh all-time-high this week. Fun fact: Bitcoin prices have, more or less, been above where they were in the early COVID insanity of 2021 for most of the year. In January, Wall Street regulator SEC allowed Bitcoin ETFs to trade on U.S. markets; by March, prices had climbed on solid institutional demand.
That demand hasn’t waned. Billions have poured into the digital asset class in the last few days; clearly, the ‘Trump Trade’ effect is helping spur the price of the ‘coin’ just that little bit higher. Trump used to be anti-crypto, until March of this year. Then in June he took part in a rockstar-style Bitcoin conference (where it’s reported very few women attended) and for which he was handsomely remunerated.
All of a sudden, Trump is a Bitcoin President. Cue the push higher.
Really, not much else happened this week.
There are some odds and ends to consider: The number of probably-insolvent-companies on the ASX has jumped by over 30%, according to KPMG; North Korean troops are confirmed to be in Russia en route to Ukraine. Talking of Russia: Its central bank’s interest rate hit 21% this week; the MOEX took a downward turn.
Ongoing strife in the Red Sea forcing ships to go around Africa has led to record high shipping emissions globally and in a bid to figure out where China’s economy is heading, it’s come to light Wall Street banks are starting to track protests in the country as a kind of alternative indicator.
So what was HotCopper watching? Paladin stole all the attention on Monday as its worse-than-expected earnings update helped to tank other uranium stocks on contagion sentiment; perhaps more exciting, graphite player Talga shot up after announcing it had finally – finally! – won its lawsuit in Sweden, basically clearing the path forward to development and eventual production.
Next week there’ll be a lot more to talk about. But for now: The world waits to see where America is likely to head in 2025.
Australian Equities
- MinRes gives a glimpse of its legal defence as Ellison announces plans to stay
- Qantas hits new all time high on Tuesday
- BHP has reportedly given up on chasing after Anglo American
Australian Economy
- Australian ‘core’ inflation still at 3.5% despite a headline 2.8% read
- KPMG notes number of ASX-listed companies probably insolvent is up 31% over last 6mth
- The care sector is Australia’s quickest growing jobs market
International Equities
- Rio Tinto’s African Simandou iron ore mine to mine first cargo by late 2025
- Apple ships US$6B worth of iPhones from India
- Ford hit by poor sentiment as EV sales fail to impress, especially after Tesla bounceback
International Economies
- Chinese manufacturing narrowly expands by a hair’s breadth first time in 6 months
- 1 in 5 residents of Guangzhou work gig economy jobs – meaning they pay their own ‘super’
- Russia raises interest rates to 21% as inflation persists
Geopolitics
- US restricts American investors from Chinese AI, defence; disclosure rules boosted
- China flags tariff concerns in Washington meeting
- China increasingly seeking to do deals with the Afghan Taliban government
