The Reserve Bank of Australia says more hikes are expected, but it’s not on a fixed path
Australia’s central bank said it expects to continue raising its interest rates, but that it is “not on a pre-set course,” according to Governor Philip Lowe’s statement.
The board is monitoring factors including the global economy and the nation’s household spending, Lowe said.
“The Board recognises that monetary policy operates with a lag and that the full effect of the increase in interest rates is yet to be felt in mortgage payments,” the statement said. “Household spending is expected to slow over the period ahead although the timing and extent of this slowdown is uncertain.”
Jason Teh, chief investment officer at Vertium Asset Management, said rate hikes could hit the economy in early 2023 when mortgages shift from fixed rates to variable rates.
“A lot of borrowers are going to feel a big pinch on how much they can spend in the local economy,” he told CNBC’s “Street Signs Asia.”
“Around first quarter next year, I think you will see some effect in the Australian economy,” he said.
— Abigail Ng
CNBC Pro: Fund manager says a ‘turning point’ for Big Tech is near. Here’s what he’s watching
A fund manager has said that a “super week for a potential turning point” in the Nasdaq Composite could be on the horizon.
The tech-heavy Nasdaq has declined by 26.2% this year as the Federal Reserve increased borrowing costs in an effort to bring inflation under control.
Julian Howard, multi-asset investment director at GAM, told CNBC what catalyst to look out for and when it might be a good time for tech investors to re-enter the market.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Australia’s central bank hikes rates by 25 basis points as expected
The Reserve Bank of Australia raised interest rates by 25 basis points to 3.1% on Tuesday, in line with analysts forecast in a Reuters poll.
That’s the central bank’s third consecutive quarter-point hike and the eighth rate increase this year.
Inflation in Australia cooled slightly in October to 6.9%, but still stands well above the RBA’s target of 2% to 3%.
— Charmaine Jacob
CNBC Pro: Morgan Stanley turns bullish on China stocks, giving them serious upside potential
Morgan Stanley has turned bullish on China stocks for the first time in nearly two years as the country embarks on a “clear path set towards reopening.”
“We see a steep climb from here following the extreme underperformance of the last two years,” the bank said, although it cautioned the path to recovery “will be bumpy.”
Morgan Stanley highlighted a list of names that it said will benefit from the easing in China, including two it gave around 130% upside.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Beijing announces further Covid easing measures
Beijing city announced negative Covid tests will no longer be required to enter most public areas, malls or residential areas, while bars and so-called KTV lounges, or karaoke bars.
Separately, Reuters reported on Monday that China could announce a further relaxation of Covid curbs as early as Wednesday, citing two sources with knowledge of the matter.
The report said there would be 10 new measures in addition to the 20 that were put out in November.
Several cities in China relaxed Covid testing rules in recent days.
— Evelyn Cheng, Abigail Ng
Foxconn reports slump in revenue after Covid-related unrest at China plant
Apple supplier Foxconn, also known as Hon Hai Precision Industry, reported its monthly revenue for November fell over 11% compared to the same period last year.
Revenue for the month totaled 551.1 billion new Taiwan dollars ($18 billion), and was down more than 29% versus October.
The Taiwanese firm said the fall was due to “production gradually entering off-peak seasonality and a portion of shipments being impacted by the epidemic in Zhengzhou,” where the company runs the world’s largest iPhone assembly plant.
Shares of the company dropped 1.48% in Asia’s morning.
– Arjun…
Read More: Wall Street, Reserve Bank of Australia, interest rates