http://www.morganwealth.com.au Morgan Wealth Management Group Tue, 07 Feb 2012 22:42:37 +0000 http://backend.userland.com/rss092 en The RBA unexpectedly kept the cash rate on hold at 4.25%. It seems that the Board took some comfort from the improvement in financial market sentiment since early December, primarily driven by the actions of policy makers in Europe. With growth expected to be close to trend and inflation close to target, the Board decided the current monetary policy was appropriate for the current environment. However, the Board noted that should demand conditions weaken materially, it will provide scope for easier monetary policy. Press release]]> http://www.morganwealth.com.au/rba-keeps-cash-rate-on-hold/     The chance of another interest rate cut by the Reserve Bank tomorrow is diminishing – potentially given major banks a break from a flurry of bad publicity. Until last weekend, the odds were heavily in favour of the RBA making it three rate cuts in a row when its monetary policy board meets in Sydney. Surprisingly strong jobs news from the US, though, and broad-based market rallies since the start of the year have given the central bank scope to delay another cut. “People are looking at that data and saying the US labour market looks the best it has since the recession started,” said UBS interest rate strategist Matthew Johnson. “So, the case for the RBA to cut rates tomorrow is materially weakened.” The US unemployment rate last month dropped to its lowest in almost three years, adding to recent signs that...Read more ››]]> http://www.morganwealth.com.au/rate-cut-hopes-fade/ Malaysian authorities have  granted approval to Australian miner Lynas Corp to operate its 700 million ringgit ($A217 million) rare earth plant. The Atomic Energy Licensing Board says it will grant Lynas a temporary operating license. It must submit plans for a permanent disposal facility within 10 months and make a $A47 million financial guarantee with the government. The approval on Wednesday eases uncertainty for Lynas and investors after speculation that the licence could have been rejected in the face of opposition from political parties and residents near the plant ahead of national elections expected within months. The board warned on Wednesday that the licence can be revoked if conditions are breached. “The temporary licence has been approved with conditions. If these conditions are not met, the temporary licence can be suspended or cancelled and subsequent applications for the licence will not be considered,” the atomic licensing...Read more ››]]> http://www.morganwealth.com.au/malaysia-grants-temporary-licence-to-lynas-corporation/ Read more ››]]> http://www.morganwealth.com.au/investment-sign-of-economic-strength/ Read more ››]]> http://www.morganwealth.com.au/housing-woes-strain-banks/ Photo Source: Reuters World Trade Organisation judges rejected China’s appeal of a ruling that found restrictions on exports of nine raw materials break global rules and give the country’s manufacturers an unfair edge over competitors. The WTO concluded on July 5 that Chinese quotas, export duties and license requirements on overseas shipments of industrial ingredients including coke, zinc and bauxite are discriminatory. The restrictions have stoked tensions between China and its trading partners, which accuse the Chinese government of having unfair commerce and currency policies. US Trade Representative Ron Kirk called the Appellate Body report a “tremendous victory,” particularly for manufacturers and workers. The decision “ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field,” Kirk said in an e-mailed statement from Washington. Today’s affirmation of the initial panel ruling may prompt...Read more ››]]> http://www.morganwealth.com.au/world-trade-organisation-rejects-china-appeal-on-rare-earths/ Australian banks aggressively cut their exposure to Europe’s troubled economies as the region’s debt crisis intensified late last year, pulling billions of dollars in funds from Belgium, France and Spain. At the same time, Europe’s banks cut more than $US8 billion worth of loans from the Australian economy, as they began to feel a funding squeeze in their home market. Still, figures to be released this morning from the Swiss-based Bank of International Settlement show Australian banks increased their exposure to Italy by more than $US700 million in the September quarter even as fears spread that Europe’s third-largest economy would not be able to meet its massive debt obligations. There were also signs that funds were being shifted to Switzerland, which is not a member of the euro zone. The most dramatic change has been with private and public debt in Spain, where Australian-bank exposure...Read more ››]]> http://www.morganwealth.com.au/banks-pull-cash-from-europe/ Another interest rate cut next month remains the odds-on favourite after tumbling food prices sent Australia’s headline inflation rate to its lowest level since the depths of the global financial crisis. Consumer prices were unchanged in the three months to December following a 0.6 per cent rise in the third quarter of 2011, according to data released by the Australian Bureau of Statistics today. The market had anticipated a 0.2 per cent increase. The December quarter reading is the lowest since the final three months of 2008. At an annual rate, the headline CPI figure came in at 3.1 per cent, its lowest in four quarters and less than the 3.3 per cent economists had tipped. HSBC economist Paul Bloxham said the spur for a Reserve Bank interest rate cut next month would be a weaker jobs market and the worsening economic situation offshore. “We...Read more ››]]> http://www.morganwealth.com.au/weak-inflation-puts-rates-call-in-focus/ Following the precipitous falls in global equity markets in the September quarter, equity markets of the major developed economies of the US and Europe recovered significantly over the December quarter as concerns over the European sovereign debt issues were ameliorated by a flurry of discussions and activity of EU organisations aimed at staving off a collapse of the Euro.  In Asia, equity performance was more mixed, with Chinese and Indian equity indices falling by a further 6% to 7% for the quarter. In Australia, the S&P ASX200 Index increased by a modest 1.2% over the December quarter as most industry sectors achieved positive returns for the quarter.  The main drags on the index for the quarter were Consumer Staples and, more significantly, Materials where returns for the quarter were around -3% reflecting fears of recession in Europe and lower growth in China.  We note however...Read more ››]]> http://www.morganwealth.com.au/economic-and-market-commentary-january-2012/ Picture Source: Origin, AFP The door remains open for the development of a third stage expansion of the Asia Pacific export gas project launched by Origin Energy and ConocoPhillips, as the venture moves closer to a final investment decision on the second phase expansion. The partners announced yesterday that binding agreements had been reached with Sinopec for the sale of an additional 3.3 million tonnes of gas annually, coupled with the sale of a further 10 per cent equity in the project to the Chinese company for $1.1 billion, raising its total stake to 25 per cent. Once government approvals are in place, probably in the next few months, a final decision is expected to be made to proceed with the second phase. This will boost exports to 9 million tonnes annually. Despite the caution about the environmental impact of coal seam gas projects, coupled...Read more ››]]> http://www.morganwealth.com.au/origin-upbeat-as-gas-plans-expand/