Cost of finding a home rose in January

Share Markets:

US share markets produced a strong finish to their trading day. At one point the Dow was down 0.6% but by the close was up 1.1%.

The S&P 500 rose 1.3%. 

European markets were positive.

The FTSE 100 was up 0.5% and the German Dax index rose 1.3%.

The prospect of ongoing economic growth in the US and quantitative easing in Europe has lifted the spirits of equity investors.

Interest Rates: 

Movement in domestic interest rates were subdued ahead of today's RBA meeting. US long bond yields rose 2 basis points to 1.66%. German long bond yields at 0.31%, are at their lowest in over 25 years.

We expect the RBA to remain on hold today but acknowledge that it will be a close call with a significant probability of a cut.

Foreign Exchange:

The US dollar index was mildly weaker overnight while the AUD moved back into the US 78 cent range. USD weakness was put down to a weaker than expected manufacturing activity report.


Oil rose a further 2% overnight following the previous day's 8.3% lift in prices.

The prospect of reduced production appears to be behind the increase. Gold was essentially flat, failing to regain the US$1300 per ounce seen late in January.

Copper prices were marginally weaker.

Copper prices have varied over the past week on speculation over the possibility of a new Chinese economic stimulation package.


Dwelling prices across Australia's capital cities rose 1.3% in January according to Corelogic-RP Data.

Over the year to January, Canberra (-0.3%) was the only capital city not to see dwelling prices rise.

Sydney was the strongest market over the past twelve months with prices rising 13.0%.

They were up 7.0% in Melbourne, 4.6% in Brisbane, 3.1% in Adelaide, 3.0% in Hobart, 2.6% in Perth and 1.4% in Darwin.

The TD Securities/Melbourne Institute's gauge of inflation rose 0.1% in January to be up 1.5% for the year.

The AiG Performance of Manufacturing index lifted from 46.9 in December to 49.0 in January.


The HSBC China Manufacturing index was basically steady at 49.7 in January. This result is in line with a similar index released on the weekend by the China Federation of Logistics and Purchasing.


The Eurozone manufacturing PMI came in at 51.0, indicating a modest rebound in activity. In contrast, the Swiss manufacturing PMI fell sharply from 53.6 to 48.2, most likely reflecting the sharp appreciation of the Swiss franc when the central bank abandoned its intervention.


No major data released.

New Zealand:

No major data released.

United Kingdom:

The UK manufacturing PMI in January was 53.0 and December was revised higher from 52.5 to 52.7.

United States: 

US personal incomes rose 0.3% in December, however, personal spending fell 0.3%. Households appeared to be slow to react to the fall in fuel prices.

The January, the US ISM manufacturing activity index fell to 53.5, a one-year low.

Lower activity among energy producers plus bad weather is thought to have held activity back. US construction spending rose a solid 0.4% in December.

Activity shifted from home improvements to commercial and public building.

US President Obama introduced a US$4 trillion Budget that seeks to stabilize the annual deficit at around 2.5% of GDP.

The Budget seeks to raise taxes on corporations and the nation's top earners while spending more on infrastructure and housing.

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