Private inflation gauge edges up in November: Midday Roundup

A private gauge of consumer inflation edged up 0.1% in October but the annual rate of 2.6% is well within the Reserve Bank’s target band.

The TD Securities-Melbourne Institute survey comes one day before the Reserve Bank holds its monthly meeting, in which it is expected to cut rates for the first time in 12 months.

TD Securities head of Asia Pacific research Annette Beacher said “only three months ago the RBA board considered further policy tightening after a strong inflation print, and tomorrow the board may discuss returning monetary policy to a more neutral stance after a soft inflation print.”

“We believe on balance the prudent path is to leave the cash rate at 4.75% for now.”

Official inflation figures out last week were lower than expected.

Shares flat after weak offshore leads

The Australian sharemarket has opened flat this morning after a weak lead from overseas markets last week, following the resolution of industrial action launched at Qantas that caused the airline to ground its entire fleet across the planet.

The benchmark S&P/ASX200 index was down 5.3 points or 0.1% to 4348 at 12.100 AEST, while the Australian dollar reached a two month high at $US1.07c.

AMP shares fell 1.37% to $4.32, while Commonwealth Bank shares fell 0.66% to $49.63. NAB shares lost 0.58% to $25.84, as Westpac lost 0.76% to $22.50.

Qantas shares have lifted 6.5% to $1.64 after the announcement was made that industrial action would be cancelled and flights would resume.

In the United States, the Dow Jones Industrial Average gained 22 points or 0.2% late last week.

Chi-X opens for business

Australia has seen the establishment of its latest stock exchange, Chi-X, after opening for business following months of preparation.

The exchange, which is operated by a Japanese finance group, is now the second market to operate alongside the ASX, which until now had been the only operator.

Minister for financial services Bill Shorten and treasurer Wayne Swan said in a statement the addition of a new trading platform would benefit investors.

“We welcome the launch, which marks the start of a new era for Australia’s financial market and fulfils the Government’s promise to open up Australia’s equity market to competition,” both commented.

“We have already experienced some of the tangible benefits from competition, ahead of the launch of Chi-X’s operations in Australia, in terms of reduced costs, improved services and greater innovation.”

The exchange will operate in a trial mode for a few days.

Emerson says CHOGM commitment to free trade good outcome

Meanwhile, trade minister Craig Emerson says a final communiqué from the Commonwealth Heads of Government Meeting reaffirming a commitment to free trade is a good outcome.

“If a group as diverse as CHOGM can agree we shouldn’t be embracing protectionism then that’s a good thing, that has value,” Emerson told AAP.

He also drew attention to the establishment of an Australia-Nigeria Trade and Investment Council, to be co-chaired by Hugh Morgan.

“It will be a useful and memorable decision,” he said.

“These relationships need to start somewhere, and this will see a more energetic engagement in a country of 150 million people that has been growing very strongly.”