Leading economists expect the Reserve Bank is likely to hold official rates at 2.5% when it meets later today, with some predicting rate increases later in the year.
“Interest rates have already been cut to record lows and evidence continues to build that rate cuts are getting traction,’’ AMP Capital chief economist Shane Oliver told Fairfax.
‘‘Our assessment remains that the RBA would prefer to wait for the full impact of past rate cuts to flow through and is now more focused on achieving and maintaining a lower level for the Australian dollar.’’
JB Hi-Fi increases profit despite falling software sales
JB Hi-Fi has reported its net profits in the December half are up 10% year-on-year to $90.3 million, with the company’s full-year net profit now expected to rise at least 8.3% to $126 million.
The results were despite an 11% fall in music, movies and computer games sales for the half, which was offset by increases in sales for consumer electronics devices and appliances.
“There’s a lot of life left in the software market… every new store is still opening with a full range of music, movies and games,” JB Hi-Fi chief Terry Smart says.
“There’s no doubt that the market is declining, but what we can do is benefit from consolidation that may happen in the industry and really leverage that strong customer base we still have today.”
Business lobby group praises Abbott over SPC Ardmona
The Australian Chamber of Commerce and Industry praised the federal government for refusing assistance to SPC Ardmona, as it issued its quarterly business expectations survey for December.
“The government has shown impressive resolve in terms of refusing to hand out subsidies to businesses that are struggling,” ACCI acting chief economist Burchell Wilson said.
“This is the sort of discipline that has to be displayed in order to, not only return the budget to surplus, but in order to strengthen the economy.”
The Dow Jones Industrial Average is down to 5201.9. The Aussie dollar is down to US87.52 cents.