End of the Week Start of the Month
This week, there is a strong focus on local and international economic data, inflation, interest rates and China’s economic health.
The US Federal Reserve Bank (Fed) met, and the market has reduced expectations of a rate cut at the next meeting in March 2024 to 36%.
Perhaps the Fed is cooling the market’s expectations of a rate cut; they don’t want this to be priced in immediately.
The Fed wants to see services inflation come down more yet: we know that car insurance is a key contributor to this number and this is expected to peak soon.
Fundstrat highlights that of the 0.41% monthly change, motor vehicle insurance is the biggest contributor.
Remove this impact, and the inflation data is at the US Fed Reserve’s ideal target of inflation. Stay Tuned.
And More: US Car Insurance is at its highest level in more than 50 years. This is expected to moderate.
More economic data due between now and the next Fed Meeting, March 20, 2024.
Meanwhile, in Australia, the Reserve Bank is meeting on Tuesday, 6th February 2024, and the moderating inflation (December Quarter CPI: 4.1%: 2-year Low) suggests less probability of a rate rise next week.
Although insurance premiums, used cars, and rent remain high, as reported by the AFR, the inflation rate and cost of living are starting to reduce. A welcome sign more many.
The conversation on iron ore, natural resources and electric vehicles is continuing, with Chinese property giant, Evergrande liquidating, questioning whether this will cause reduced demand for iron ore- no sign of this in the commodity prices to date.
Australian CPI data since 1930
Big Week with more to come – lots of profit reports and economic data to drive market direction short term.
Step back, consider your personal position and focus on your own wealth management strategies and financial goal setting and seek advice. A sense check of the noise is important.
Tune in to Disrupt Radio Monday 5th, February, at 7am to hear Siobhan Blewitt, Founder & CEO of Frais Capital, talking with Libbi Gore on the big topics for the month ahead.