Rate rises are coming
Monday, November 5, 2007/
If you needed another reason to lock in an interest rate rise of at least 0.25% this week, today’s grab bag of economic data is it.
First, the TD Securities-Melbourne Institute inflation gauge shows inflation increased by 0.3% in October. The result gives a 12 month inflation figure of 3.3%, the highest yearly increase since March and well above the Reserve Bank of Australia’s target band of 2% to 3%.
New motor vehicle sales were also strong in October, with the 89,289 sold almost 9% up on September and 11.7% higher than this time last year.
And, more than ever, the employment market is clearly straining at the seams – according to ANZ job ads series, the number of jobs in newspapers and online in October increased by 2.7% to 254,554, the highest number in the history of the series and 30.5% higher than October 2006.
On this morning’s markets, however, the trend is decidedly downward, with the prospect of yet another big Wall Street head rolling – this time, Citigroup chief executive Charles Prince – spooking share traders still trying to dispel the possibility of further sub-prime strife from the back of their minds.
At 1pm the S&P/ASX 200 is down 1% on Friday’s close to 6631.4, while the Australian dollar is trading at US92.09c, up on Friday’s Sydney close of US91.60c.