Interest rate policy remained front and centre of attention locally and globally. The Reserve Bank of Australia raised the Official Cash Rate by 0.50 percentage points for a second consecutive month, as anticipated.
Most investors are expecting another half percentage point increase in borrowing costs in early August, when the Reserve Bank of Australia meets again.
Australian shares registered gains of more than 5%. Most major overseas share markets performed even more strongly – the MSCI World Index closed the month 8.0% higher, with selected markets enjoying double-digit gains. This made July the best month for risk assets since late 2020, when encouraging Covid vaccine trial results were first reported.
The November CPI print showed that monthly trimmed mean inflation decelerated from 3.5% to 3.2%. While services and housing inflation continued the downward trend, electricity prices surprised to the upside after various subsidies came off.
Manufacturing PMI in November increased to roughly 50, hovering near the breakpoint between expansion and contraction.
