February 2024 Insights

As February kicks off, many of us are settling back into our regular routines and turning our focus towards the year ahead.

Cooling inflation and a strong economy, coupled with relatively low unemployment, have sent investors back to Australian shares, with the S&P/ASX 200 hitting an all-time high on the last day of January. It was up by more than 12% since the end of October 2023.

Annual CPI for 2023 was 4.1%, much closer to the Reserve Bank’s target of between 2% and 3%. CPI in the December quarter was the lowest since March 2021 and below market expectations. The unemployment rate remained steady at 3.9% in December.

However, prices for most goods and services are still rising, and the decline in discretionary spending is impacting retail sales. Retail turnover fell 2.7% in December after a 1.6% decrease in November.

The falling inflation figures and the expectation that the RBA would hold interest rates resulted in a drop in the Australian dollar, which is also under pressure from a strengthening US economy.

Oil prices, affected by a contraction in Chinese economic activity and the crisis in the Middle East, have steadied, with Brent Crude at just over $80 a barrel.

While the iron ore price halted its rise in January with a rapid dip mid-month, it has since climbed back, defying expectations.

If there’s something affecting your financial situation that you’d like to discuss, please don’t hesitate to reach out to our team.