Stability in financial markets over 2017 and early 2018 came to abrupt end in recent weeks, with a surge in market volatility and big falls in equity markets and prices for many commodities.

2018 has seen a fairly mixed start to the year, with significant differences between regions and industries.

2017 Surprised on the upside. Small deficit expected in 2018.

The economy is likely to have grown at a solid clip in Q3. While some pieces of the growth puzzle are falling into place, the stark divergence between business and consumer spending remains despite jobs growth. Non-mining and infrastructure investment will be encouraging for the RBA, but higher wages growth is required.

The Australian beef cattle industry has enjoyed a great run over the past couple of years, with the Eastern Young Cattle Indicator (EYCI) hitting a record over 720c/kg in September last year.

There were very few consistent themes across the commodity complex this quarter.

The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.

The NAB Rural Commodities Index rose 2.1% in October, its first monthly gain since May.

The index tracks 28 commodities weighted by the relative size of each commodity in the Australian agricultural sector.

Q2 GDP data will be released on Wednesday 6 September at 11:30am AEST. Additional partials will be available tomorrow and may alter our forecast.

The NAB Rural Commodities Index fell 1.2% in July as generally higher grain prices were offset by weakness across livestock, dairy, cotton and mixed performance in horticulture.

Gold began 2017 strongly, up 8% in the first half – despite falling 2% in June. This weakness has continued into early July, with the strong US payrolls data exerting further weakness on gold. However, gold received some support following Fed Chair Janet Yellen’s semi-annual testimony, which the markets interpreted as somewhat dovish.

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