The following opinion piece is reproduced by permission from Joseph Palmer & Sons (VIC). For more information, please visit their website www.jpalmer.com.au
In a much anticipated move the US Federal Reserve raised its funds rate by 25 basis points to a range of 0.5% to 0.75%. The Bank also pencilled in a forecast of three rate rises in 2017. The US Dollar rallied and stocks eased following the move.
Retail sales in the US rose by 0.1% in November to be 3.8% higher year-on-year.
Manufacturing output in the US eased slightly in November due to a fall in motor vehicle manufacturing.
Oil prices eased overnight after OPEC forecast a growing surplus in 2017 unless output is wound back. OPEC produced 33.87 million barrels of crude in November, an increase of 150,000 from October.
A syndicate lead by Macquarie Group has launched a cash takeover for Tatts Group worth about $7.3 billion. Tatts is currently in merger negotiations with TabCorp.
One of the best aspects of this job is keeping a track of the many markets around the world and trying to pick where a move in one may influence another. The Italian bond market has been most interesting in recent weeks, with a lot of money made and lost as yields rose strongly into the referendum, the 10 year rose from around 1.45% to 2.21% and since Sunday and with a new Prime Minister has fallen back to 1.78%. So too with the oil price as OPEC does and OPEC doesn’t do anything but talk.
Apropos my comments yesterday, we will be in touch with clients who we believe should reduce risk so the comments should be taken as “one size fits all”, please excuse me for not making that clear.
Index futures are trading at 5,545, suggesting a 37 point drop today.
For more information, please visit www.jpalmer.com.au