A fall on Wall Street has sent Australian stocks lower, while the Reserve Bank of Australia (RBA) lifts interest rates by 0.25 of a percentage point, taking the cash rate target to 3.1 per cent.
We brought you the latest on what was happening on the markets throughout the day in our live blog.
Disclaimer: this blog is not intended as investment advice.
Key events
Live updates
ASX at the close
By Samuel Yang
This is where the market finished up at the close of local trade shortly after 4:00pm AEDT.
- ASX 200: Down 0.5 per cent to 7,291
- All Ords: Down 0.5 per cent to 7,488
- Aussie dollar: 67.27 US cents
- Nikkei: Up 0.3 per cent to 27,901
- Hang Seng: Down 1.1 per cent to 19,302
- S&P 500 futures: Up 0.1 per cent to 4,008
ASX sinks as rates rise again
By Samuel Yang
The Australian share market has closed with moderate losses, led by interest rate sensitive sectors such as real estate and technology, along with education and industrial companies.
Gold miners were also on the retreat as the price of the precious metal dipped amid a surge in the US dollar overnight - Novonix had the biggest decline on the ASX 200 index.
That rise in the greenback saw the Australian dollar briefly trade below 67 US cents, before the Reserve Bank's 0.25 of a percentage point rate rise pushed it back up around 67.25.
Coal miners were among the firms bucking the trend amid a jump in prices for thermal coal, used in power stations - Whitehaven, Coronado and New Hope were all among the top 10 gainers.
That's all from our live blog today, hopefully you can join us again for all of tomorrow's market action.
Savers not seeing the full benefit of rising rates
By Samuel Yang
Banks have been slow to pass on the full rate hikes to all savers according to those who monitor the products on offer.
"The reason the banks aren't fully passing on the increase is just to fatten up their margins," Canstar finance expert Steve Mickenbecker said.
"They've got the opportunity right now as rates are going up and they have lots and lots of deposits."
Mr Mickenbecker said while people willing to lock their money away in term deposits can earn interest rates of up to 5 per cent, people with basic savings accounts are losing out.
The best base rate in the market at the moment is 3.5 per cent. The average is only 1.73 per cent — that's half of the best rate.
Retirees are one of the groups that benefit most when savings account rates go up.
Read more from ABC business reporters Michael Janda and Rhiana Whitson, click the link below.
Statement from the Reserve Bank on rates decision
By Samuel Yang
Here are some key messages from RBA governor Philip Lowe after the central bank held its policy meeting.
Economic growth is expected to moderate over the year ahead as the global economy slows, the bounce-back in spending on services runs its course, and growth in household consumption slows due to tighter financial conditions.
The Bank’s central forecast is for growth of around 1½ per cent in 2023 and 2024.
The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course.
It is closely monitoring the global economy, household spending and wage and price-setting behaviour.
The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.
The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.
Breaking: RBA raises cash rate by 0.25pc
By Samuel Yang
The Reserve Bank of Australia (RBA) lifts interest rates by 0.25 of a percentage point, taking the cash rate target to 3.1 per cent.
It was the bank's eighth straight rate rise since it started lifting the cash rate from a record low of 0.1 per cent in early May.
The cash rate is now at its highest level in a decade, since November 2012, when it was 3.25 per cent.
The increase will add around $75 to the monthly repayments of a household with a $500,000 mortgage debt on a 25-year term.
Farm export values push to near record high
By Samuel Yang
A La Niña-driven wet and cold spring has not managed to dampen the value of Australia's agricultural produce.
Exports of Australian farm products are expected to hit a record-breaking $72 billion this financial year, according to the national commodity forecaster ABARES.
Fruit and vegetable prices are set to peak in mid-December.
Good crop conditions in WA and SA are making up for east coast losses.
Read more from ABC Rural's Clint Jasper, click the link below.
'Net exports will subtract around 0.2 ppts from GDP growth': BIS Oxford Economics
By Samuel Yang
Australia’s current account has swung into deficit in Q3 and the deficit was large.
Sean Langcake, head of macroeconomic forecasting for BIS Oxford Economics, said the growing account deficit was partly because the mining profits were flowing to offshore investors.
"The trade balance fell sharply as commodity prices corrected somewhat from their recent peaks. Further, strong growth in mining sector profits saw an uptick in dividend payments to non-residents," he said in a note.
"The terms of trade fell by 6.6 per cent in Q3. Commodities prices remain elevated since the beginning of the year, but there has been some normalisation since the initial shock caused by the Russia-Ukraine war.
"Net exports will subtract around 0.2 ppts from GDP growth in tomorrow’s national accounts."
ABS: Net primary income deficit $33.2b in Q3 22
By Samuel Yang
Australia has recorded a $2.3 billion current account deficit in the September quarter 2022, following 13 consecutive quarters of a current account surplus.
The balance on goods and services decreased by $11.1 billion but remained in a surplus of $31.2 billion.
"The current account deficit reflected a narrowing but robust trade surplus, which was offset by a record high income deficit in the September quarter," acting head of international statistics at the ABS Grace Kim said.
Imports of goods and services increased 8.2 per cent, with travel services driving the increase as Australians continued to travel overseas after prolonged border closures.
The increase in goods imports was driven by fuels and lubricants with diesel the main contributor.
Exports of goods and services decreased 0.2 per cent as shipments of mining commodities were disrupted during the quarter as east coast floods impacted key trading ports.
High rainfall throughout 2022 supported strong production and exports of agricultural commodities such as cotton.
Exports of travel services increased as arrivals of international students and tourists continued to rise following the re-opening of Australia’s international border earlier in the year.
The Terms of Trade fell 6.6 per cent, driven by a decline in export prices with decreasing coal and metal ore prices.
The net primary income deficit widened to a record $33.2 billion in the September quarter 2022.
“The key contributors to the record high income deficit were high operating profits, and increased non-resident investment in the resource sector, which contributed to strong dividend payments to non-resident portfolio investment.” Ms Kim added.
Calls for amending regulations in transport industry to speed up green transition
By Samuel Yang
Currently diesel trucks are subject to urban curfews, set by states or local councils, to limit noise pollution at night on residential streets.
Some electric truck manufacturers say if electric trucks were exempt, it would be good for the environment and it could transform how cities operate as they are relatively quiet.
The transport industry is the second-largest source of emissions in Australia.
The federal government's consultation paper for its National Electric Vehicle Strategy says reducing those emissions would be "critical" to achieving its lagging emission targets.
However, electric trucks only make up less than 1 per cent of new sales.
Read more from Kym Agius, click the link below.
Snowy 2.0 contractor Clough collapses after a takeover deal fell through
By Samuel Yang
Perth based engineering group Clough has gone into administration after Webuild dropped a proposed acquisition on Monday.
Webuild is one of Italy's biggest construction groups.
Clough’s parent company Murray & Roberts sold its engineering business to Webuild late last year for $350 million with conditions.
If the deal went ahead, Webuild would be in charge of building hydropower project Snowy 2.0.
The company said in a statement it had agreed with Murray & Roberts that there was "no reasonable prospect" for the deal to reach a successful completion.
Webuild, which had announced the purchase last month without disclosing any financial details, said it would continue to "look for opportunities for growth, including in the Australian market".
Clough has approximately 1,250 Australia-based employees, and approximately 1,250 overseas employees in Papua New Guinea, the UK and the US.
It has projects across the energy, resources and infrastructure sectors.
Homeowners with fixed rate loans face a 'mortgage cliff'
By Samuel Yang
Economists are warning fixed rated borrowers face a "mortgage cliff" when they roll off their deals next year. These homeowners could see their monthly repayments jump by up to 65 per cent when they revert to the variable rate.
Watch the story from ABC business reporter Emily Stewart.
RBA tipped to lift rates by a quarter of a percentage point
By Samuel Yang
The Reserve Bank has increased the cash rate every month since May and is expected to lift it again today by 0.25 per cent.
That would take the cash rate to 3.1 per cent, and variable interest rates above 6 per cent.
The statement following the RBA's board meeting this afternoon will be crucial in signalling where it's likely to go.
But the Reserve Bank's language won't be definitive.
It will be more nuanced, and its disclaimers about the timing of rate rises (or cuts) will be far more obvious.
Read more from ABC business reporter Nassim Khadem's analysis, click the link below.
Wall Street drops as jitters over US Fed rate hike policy return
By Samuel Yang
The main US benchmarks dropped on Monday as investors fretted that better-than-expected service-sector activity could point to the Federal Reserve hiking interest rates for longer, while shares of Tesla slid on reports of a production cut in China.
The electric-vehicle maker shed 6.4 per cent on plans to cut December output of the Model Y at its Shanghai plant by more than 20 per cent from the previous month.
This weighed on the Nasdaq, where Tesla was one of the biggest fallers, putting the tech-heavy index on course for its second straight decline.
Broadly, indices were suffering as data showed US services industry activity unexpectedly picked up in November, with employment rebounding, offering more evidence of underlying momentum in the economy.
The data comes on the heels of a survey last week that showed stronger-than-expected job and wage growth in November, challenging hopes that the Fed might slow the pace and intensity of its rate hikes amid recent signs of ebbing inflation.
"The labor market looks fine and so it's almost just this kind of bizarre world where good news is bad news," said Jonathan Waite, fund manager at Frost Investment Advisors.
Investors see an 89 per cent chance that the US central bank will increase interest rates by 50 basis points next week to 4.25-4.50 per cent, with the rates peaking at 4.984 per cent in May 2023.
The Dow Jones index closed down 1.4 per cent, the S&P 500 lost 1.8 per cent and the Nasdaq Composite dropped 1.9 per cent.
ABC launches its first live markets blog
By Samuel Yang
Good morning and welcome to our first markets live blog, where we'll bring you the latest price action and news on the ASX and beyond.
A tumble on Wall Street overnight sets the tone for local market action today.
The Dow Jones index dropped 1.4 per cent, the S&P 500 lost 1.8 per cent and the Nasdaq Composite down 1.9 per cent.
ASX futures were down 50 points or 0.7 per cent to 7,292 at 7:24am AEDT.
At the same time, the Australian dollar was down 1.4 per cent to 66.92 US cents.
Brent crude oil was down 2.8 per cent, trading at $US83.16 a barrel.
Spot gold dropped 1.7 per cent to $US1,767.66.
Iron ore rose 2.1 per cent to $US109.60 a tonne.
