The Australian market followed buoyant global markets higher last week. The Reserve Bank of Australia released minutes of its November board meeting which showed policymakers warning of “considerable uncertainty” about how quickly wages growth and inflation might pick up. This is despite the labour market performing more strongly than the central bank had expected over the past year. The market, however, shrugged off the central bank’s concerns over weak wages growth and soft inflation. The best performing sectors in the market were energy and materials following a bounce in crude oil and iron ore. The worst performing sectors were utilities, financials and consumer discretionary. In company news, Woolworths was higher after telling shareholders that sales performance had remained solid this financial year to date. Qube Holdings fell after the logistics group said that it expected overall market conditions in FY18 to remain similar to FY17, with pressure on rates from competition in the company’s key markets. Webjet was one of the worst performing companies on the ASX 200 index after guiding to FY18 operating earnings of $80 million in FY18m, well short of what analysts had forecast for the travel group.
In global markets, Wall Street was higher as indices jumped on Tuesday, led by gains in this year’s top-performing technology sector. Third quarter earnings season wound down and no major economic data releases resulted in slowed trading activity ahead of Thursday’s Thanksgiving holiday. The U.S. dollar suffered a big decline after minutes from the latest Federal Reserve meeting indicated that officials expect inflation to remain persistently low even as support for an interest-rate increase grows.
European markets were higher as confidence over global economic activity and optimistic business survey results outweighed concerns over the collapse of coalition government talks in Germany.
Asian markets were mostly higher, following the global rally as stronger global growth and rising corporate profits lured investors into equities. The SSE Composite Index moved in the opposite direction on concerns over China’s deleveraging efforts which also caused 10-year government bond yields to rise to levels not seen since 2014.
Crude oil rose due to a fall in U.S. crude oil inventories and supply disruptions including a temporary shutdown of the Keystone Pipeline between Canada and the United States. The Australian dollar was higher against most major global currencies this week and rose above US76c, supported by a surge in the price of iron ore.