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Inflation remained steady in February, at 2.5 per cent and core inflation at 2.8 per cent; however, the RBA remains cautious and has not guaranteed further cash rate cuts in 2025. Some economists are predicting further cuts in 2025, but time will tell.

While there is ongoing tension between Russia-Ukraine and the Middle East, and a looming trade war due to Trump’s proposed tariffs, the global economic outlook continues to remain unpredictable.

US markets reacted to the lower-than-expected consumer spending and continued geopolitical issues, with another month of volatility.

It’s also been volatile on the Aussie share market, with the ASX 200 losing ground earlier in the month, bouncing back to reach an all-time high, only to start falling again to close at it’s lowest point in two months.

A similar pattern has been happening with the Aussie dollar, reaching a high of $0.64US cents mid-February, then losing momentum, and now hovering around $0.62US cents.

The government provided some cost-of-living relief, which has had a cooling effect on inflation – sitting at 2.4 per cent at the December 2024 quarter, down from 2.8 per cent in September 2024. Trimmed inflation is 3.4 per cent, down from 3.6 per cent last quarter. While inflation is nearing its target, multiple interest rate cuts throughout 2025 would be welcomed by mortgage holders.

Recently, Trump 2.0 has been making global headlines, the tech clash between the US and China has also been dominating. Last week, US tech giant Nvidia recorded a 17 per cent plunge in a single day, which is now the biggest loss in US share market history. This was due to Chinese AI company DeepSeek unveiling a program to rival its competitors and become more cost-effective to operate. Markets made a quick recovery.

Domestically, the ASX 200 continued a bumpy ride, although it finished the month at an all-time high of 8,532 points.

The Aussie dollar is holding steady around 62 US cents.

The government provided some cost-of-living relief, which has had a cooling effect on inflation – sitting at 2.4 per cent at the December 2024 quarter, down from 2.8 per cent in September 2024. Trimmed inflation is 3.4 per cent, down from 3.6 per cent last quarter. While inflation is nearing its target, multiple interest rate cuts throughout 2025 would be welcomed by mortgage holders.

Recently, Trump 2.0 has been making global headlines, the tech clash between the US and China has also been dominating. Last week, US tech giant Nvidia recorded a 17 per cent plunge in a single day, which is now the biggest loss in US share market history. This was due to Chinese AI company DeepSeek unveiling a program to rival its competitors and become more cost-effective to operate. Markets made a quick recovery.

Domestically, the ASX 200 continued a bumpy ride, although it finished the month at an all-time high of 8,532 points.

The Aussie dollar is holding steady around 62 US cents.

As 2024 drew to a close, the year finished much as it had begun, with a strong focus on inflation, stagnant interest rates and Australia’s housing market.

Returning inflation to target is the Reserve Bank’s highest priority. While there has been substantial progress as inflation continues to fall, figures are yet to reach the 2-3% target set by the RBA. The latest data shows a slight rise to 2.3% with underlying inflation sitting at 3.2%, down from 3.5%.

In December, the Board left the cash rate at 4.35% which hasn’t moved in 14 months. All eyes will be on the RBA announcement in February as there has been speculation of a rate cut; however, the Board remains cautious and will not give any indication as to when they will make the first rate cut in 2025. House prices continued to soften, with national home prices recording the first decline in almost two years in December.

Stock markets closed out a strong year on a weaker note with the Dow Jones ending December around 5% lower and the S&P/ASX 200 falling a little over 3% as the anticipated ‘Santa rally’ did not eventuate.

The Australian dollar ended the year in the doldrums at just under 62 US cents.

While headline inflation eased to 2.8% in the September quarter, the Reserve Bank remains unmoved on interest rates. RBA Governor Michelle Bullock says the drop in the cost of living may be welcome relief for most of us, but the Board’s measure to watch is trimmed mean inflation and that’s still not “sustainably” in the desired target range of 2-3%. It’s not likely to get there until late in 2026, the RBA predicts.

The sharemarket reacted sharply to the Governor’s comments in the last days of a month that had seen several all-time highs. US President-elect Donald Trump’s promise for 25% tariffs on Canadian and Mexican goods also contributed to the billion dollar shares sell-off. Nonetheless, the S&P ASX200 finished November 3.4% higher.

The Australian dollar is also taking a beating from the possibility of both the US tariffs and the RBA’s rates forecast. It hit a seven-month low below 65 US cents near the end of the month.

And, in good news the ANZ-Roy Morgan Consumer Confidence Index, while down slightly has stayed above a mark of 85 points for the sixth week in a row for the first time in two years. Commonwealth Bank projections expect a boost in sales for small businesses thanks to the Black Friday and Cyber Monday sales and the coming festive period.

Interest rates are expected to remain on hold when the Reserve Bank board meets next week despite welcome news on the inflation front. The Consumer Price Index rose just 0.2% in the September quarter and 2.8% for the year, the lowest rate in just over three years. Prices fell slightly for alcohol and tobacco, clothing, housing, health, and financial services. Transport costs also fell for the first time since 2020.

Share prices softened during the past two weeks of October, recorded the worst monthly performance in six months. The S&P/ASX 200 closed slightly down by 0.3% over the month, after again reaching record highs mid-month.

The Australian dollar ended the month at 65.7 US cents after almost hitting 70 US cents just a few weeks ago. Investors were reacting to the weaker than expected Australian retail sales and stronger US unemployment and retail sales figures.

Iron ore has hit a one-month low at USD104.08 after the heady highs in January of almost USD 145 in January. All eyes are on meetings in China next week about expanding its stimulus measures.

Global stock markets – including the ASX – largely stabilised by the end of August after a turbulent month.

It was a rocky start when markets everywhere fell after news of high unemployment figures in the US and an interest rate move by Japan’s central bank. Despite the dramas, the S&P/ASX 200 closed 1.28% higher for the month marking a gain of just over 10% for the 12 months to date.

A slight drop in inflation figures – down to 3.5% in July from 3.8% the previous month – had investors checking the Reserve Bank’s reaction but most economists agree there’s no chance of an interest rate cut this year. The RBA’s not forecasting inflation to get to its preferred levels until late 2026 or early 2027.

While the cost of living has dropped ever so slightly (and partly due to $300 federal government rebates on electricity bills), wages have risen. The Australian Bureau of Statistics reports that wages rose by 4.1% in the year to June. It means that wages are now keeping up with the cost of living.

The good news from the markets and inflation data contributed to a small upswing in consumer confidence although there’s still much ground to recover after the losses caused by Covid-19.

Market watchers, investors and mortgage holders, who’d been anxiously awaiting the release of the latest inflation data at the end of July, could neither jump for joy nor collapse in despair.

The best that could be said about the figures was that they were not as bad as they could have been. It remains to be seen how the Reserve Bank board will view inflation’s modest increase when it meets on August 5 and whether it decides on an interest rate rise to counter it. The Australian Bureau of Statistics says prices rose 1% in the June quarter and 3.8% annually.

Retail sales continue to splutter along with the latest data showing a 0.5% increase in sales in June thanks to the sales but over the quarter, retail sales volumes fell 0.3% for the sixth time in the past seven quarters. Meanwhile, building approvals fell 6.5% in June after a 5.7% rise the previous month.

The ASX S&P 200 index finished the month strongly with an increase of around 4%, riding out a mid-month plunge. But the currency didn’t fare quite as well, falling below US65 cents for the first time in almost three months. In the US, the S&P 500 finished the month almost where it began after a big mid-month upward spike then fall but, for the year to date, it’s recorded an increase of almost 15%.

Technology stocks have driven Australian shares, and global markets, to new highs in the last 12 months. The S&P/ASX 200 finished the financial year 7.8% higher, slightly less than the previous year. Technology stocks gained 28% during the year.

In the US, the S&P 500 index rose 14% in the first six months of 2024 in one of the strongest performances since the dotcom bubble of the 1990s. Tech stocks were behind much of the gain, in particular AI chipmaker Nvidia, which overtook Microsoft and Apple as the world’s most valuable public company last month.

An interest rate cut is widely expected in September in the US but in Australia, many commentators predict another rate increase before the end of the year to help tame inflation. The RBA left interest rates unchanged at 4.35% at its June meeting but news that annual CPI was up by 4.0% in May compared with 3.6% in April will give the Bank cause for concern.

The Australian dollar ended the financial year almost where it began at just under US67 cents, after 12 months of volatility with highs of almost US69 cents and lows under US63 cents.