As the market players are aware, the Reserve Bank of Australia had kept the cash rate unchanged. Currently, the cash rate happens to be 1.50%. It can be said that the investors in the Australian markets need to consider some macro-economic variables before they investments. The Australian economy happens to be sensitive to the news related to the trade war between the US and China. Also, recently, The Royal Commission had released the final report which the market was eagerly waiting. Moreover, housing prices have been witnessing downward momentum. Thus, it can be said that investors in Australia need to carefully evaluate several parameters in order to have a broad understanding. If the worries related to the downturn in global economic growth increases, it might significantly impact the broader Australian economy as well as the financial markets.
The statement of monetary policy which has been issued had shown concerns related to the uncertainty revolving around the housing prices. As stated in the statement, nationally, the housing prices have witnessed a rise of approximately 50% in the span of 5 years to September 2017. However, the statement also added that, since then, these had witnessed a fall of approximately 8%. The report also contained reasons which have been responsible for the fall. The lower interest rates, robust growth with respect to the population as well as positive conditions with regards to the labour market, particularly in the NSW (or New South Wales) as well as Victoria, where there have been largest capital-city price falls. Moreover, especially in Sydney, a rise in the housing supply has made a contribution to the decline in the prices.
The statement of the monetary policy had stated that the demand of households with respect to the credit has eased especially for the investors. For some of the borrowers, there has been tightening with respect to the credit supply. However, outlook with respect to the business investment is positive. The statement had also thrown light on the labour market. It showcased that the conditions with regards to labour market have witnessed an improvement. In the quarter ended December, the unemployment rate averaged 5%. These conditions, with respect to NSW as well as Victoria, are positive as the unemployment rates happen to be between 4%– 4½%. Not so long ago, the governor named Mr. Philip Lowe had shown concerns related to the trade tensions. He stated that trade worries have been affecting global trade as well as some decisions with respect to the investments. The central bank of Australia gave information related to the Chinese economy. It stated that the growth with respect to the economy of China has slowed and authorities have been easing the policy. However, the Chinese authorities are also focusing on the risks with regards to the financial sector.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.