Inflation gauge rises but still low in September: Midday roundup
A private gauge of inflation rose during September, but still remained low, giving the Reserve Bank plenty of scope to cut the official interest rate at tomorrow's meeting.
The TD Securities-Melbourne Institute Monthly Inflation Gauge rose 0.2% in September, following a rise of 0.6% in August.
The gauge said inflation grew 2.4% in the year to September – well within the RBA's 2-3% target band.
Prices rose among fruits and vegetables, and travel and automotive fuel, while prices fell in rents, footwear and AV equipment.
"We forecast headline inflation to increase by 0.8%, to be 1.4% higher than a year ago," TD Securities head of Asia-Pacific Research Annette Beacher said in a statement.
"Underlying inflation should increase by 0.5% in the quarter, lifting the annual rate slightly from 2.0% to 2.1%."
Arrium shares jump 26% after bid rejection
Shares in steel manufacturer Arrium have jumped 27% after the company rejected an unsolicited takeover offer.
The 75 cents per share deal was from a consortium made up of Noble Group and POSCO Australia, among others.
"The board believes that the proposal undervalues Arrium in the context of a change of control transaction and that the proposal is highly conditional," the company said.
"The consortium's requirement to reach an agreement with Arrium's lenders (the proposed terms of which have not been disclosed to Arrium) and the requirement for six weeks of due diligence create significant transaction risk."
Manufacturing index continues to fall
The manufacturing industry has continued to contract, according to the latest figures from the Australian Industry Group performance of manufacturing index.
The index fell 1.2 points to 44.1 in September, below the 50-point level separating expansion from contraction.
Only two sub sectors, textiles clothing and footwear, and paper printing and publishing – recorded increases in activity.
"The softer conditions for manufacturers recorded in September looks like continuing in the months ahead with a sharper decline in the forward-looking new orders sub-index," chief executive Innes Willox said in a statement.
"Suppliers to the mining sector, which have generally been a source of encouraging news in recent years, reported sharp falls in new orders as the mining sector responds to reduced prices and an increased likelihood of reductions in demand."
Shares flat after weak offshore lead
The Australian sharemarket has opened flat this morning, following weak leads from offshore markets late last week.
The benchmark S&P/ASX200 index was up 4 points or 0.1% to 4391.0 at 12.00 AEST. In the United States last week, the Dow Jones Industrial Average fell 48 points or 0.4% to 13,437.1.