In-case-you-missed-it Monday: the real stories that mattered in the financial papers this week.
INFLATION
All eyes are still on the inflation data, which much to everyone’s relief, came in softer than expected, at 3.4%. We’re not all that far above the RBA’s target now, so the argument for higher rates seems to be toast.
What’s more, if you look at the most recent quarter and annualise it, we’re now at the bottom of the 2% target band, and the RBA’s forecasts seem like they’ll be very hard to hit from here.
So definitely no more hikes. Especially since energy prices – one of the big drivers recently – have started to deflate.
GLOBAL INFLATION
At the end of the day, the trend is your friend. Inflation is falling the world over, in both advanced and emerging economies, and the share of countries with above-target inflation is falling quickly.
REAL WAGES
All that said, we have had quite a spell of pretty intense inflation, and wages certainly haven’t been keeping up. Recent data shows us that Australia is actually well below the OECD average when it comes to real wages.
In fact, Australia is the worst performer in the bunch, with real wages falling 6.1%. That hurts.
RISK ON BABY
Finally, while many people are worried about an AI-stock driven bubble in share prices, fund managers are all in. The Goldman Sachs Risk Appetite Index has spiked to the highest level since the boom of 2021. Good times!
And that’s (pretty much) everything worth knowing this week.
JG.