A jump in employment, and a drop in the unemployment rate, has increased the chance of an interest rate hike next month, as the Reserve Bank works to keep inflation in check. About 62,300 people found work in December, according to the ABS, pushing the unemployment rate down to 4.1 per cent. The participation rate – the number of people looking for work – increased slightly while other measures such as hours worked and underemployment all improved. The strong figures pushed bond yields higher and investors have now priced in a 50 per cent chance of a rate hike next month, and a 100 per cent chance of an increase by May.

Listen to today's episode 🎧 

News in brief

The federal Coalition has split for the second time this year, on the back of the Nationals’ frontbench quitting the shadow cabinet on Wednesday night. Liberal Party leader Sussan Ley is now under pressure, not just to reconvene the Coalition, but to keep her job.

There are signs of improvement in the IPO market, after a tough couple of years, including just 35 listings on the ASX last year.

The OECD has called on the Albanese government to reform taxes, be more transparent on commodity revenues, and means test the NDIS, in an effort to repair the budget’s fiscal outlook.

US President Donald Trump has backed down on threats to take Greenland by force, and on promises to impose new tariffs on European countries, after he said the parties involved had reached a “framework of a future deal”.

A stencilled outline of a hand found on the Indonesian island of Sulawesi is the world's oldest known cave painting, researchers say. It shows a red outline of a hand whose fingers were changed to create a claw-like motif. The painting has been dated to at least 67,800 years ago – around 1,100 years before the previous record, according to the BBC.

Fear-o-meter

Federal Treasurer Jim Chalmers is building a reputation for one-liners. He isn’t anywhere near as acerbic as his hero, Paul Keating, but yesterday he showed his prowess in insults (not that Fear + Greed necessarily thinks that’s a good thing).

On the crisis in the Opposition: “…kindest thing you can say about the Coalition right now is that it’s a smoking ruin.”

On conservative politics: “We’re also seeing this quite bizarre race to the extreme right. The reason why the Coalition parties look like a three-ring circus is because the Libs and the Nats and the One Nation wannabes are all just trying to be this kind of paler shade of orange.”

On Susan Ley: “..to be fair to her, all of the alternatives in the Coalition or the former Coalition are worse.”

On shadow treasurer Angus Taylor: “The guy that took to an election higher income taxes and bigger deficits as shadow treasurer.”

On Andrew Hastie: “…makes Tony Abbott look like a sensible moderate.”

Fear & Greed Q+A today

After 12 consecutive quarters of house price growth, are we now seeing a structural shift in the housing market rather than an ordinary price cycle?

 

“I think we have seen a structural shift, particularly in the pricing hierarchy of our capital cities. In 2019, Perth was 42 per cent cheaper than Melbourne. Today, only two per cent separates them. That shows both the value Melbourne now presents and the extreme affordability change Perth has experienced. What’s been unusual is that prices continued to rise even during the fastest rate-hiking cycle in a generation. The cash rate is one of many factors influencing prices, and historically rate hikes slow markets — but that didn’t happen. This year will be different. Affordability pressures are much higher, and we’re expecting one, possibly two rate hikes. That affordability dynamic is going to limit price growth in 2026.” 

Greed-o-meter

Commonwealth Bank is Australia's most valuable brand, according to an annual survey by Brand Finance Australia, with Woolworths close behind.

Source: Brand Finance Australia, reporting in AFR

Forwarded from a friend? Sign up to our daily newsletter