No certainty about what direction the RBA will head next
Treasurer Jim Chalmers has released a review into the Reserve Bank of Australia and the government's initial response. Photo: AAP
Minutes from the Reserve Bank’s board meeting will likely be pored over for insights into its December cash rate decision and interest rate movements in the new year.
The RBA hiked interest rates by 25 basis points in its latest meeting, marking the eighth rise in a row as it seeks to tame inflation.
But observers are undecided about cash rate rises in 2023, with economists at the big four banks tipping anywhere between one more hike in February to three more, with the RBA hitting the brakes in May.
The job market remains a key source of uncertainty, with wages likely to rise and push up prices unless the labour market starts to soften.
Tight Labor market
November labour force statistics showed few signs of a slowdown, with the jobless rate sitting at 3.4 per cent and a surprisingly high 64,000 jobs added to the economy.
Another round of employment data will also released before the RBA meets again in February as well as the December quarter inflation figures.
The RBA will release the minutes from its December board meeting on Tuesday, the same day ANZ and Roy Morgan drop their consumer sentiment index.
The national statistics bureau will release skilled job vacancies data midweek before more detailed employment data, including an industry breakdown, on Thursday.
To top off the year, the RBA will release its private-sector credit data for the month of November.
Wall Street worries
US stocks dropped for a third straight session and suffered a second straight week of losses as fears continue to mount that the Federal Reserve’s campaign to arrest inflation will tilt the economy into a recession.
The Dow Jones Industrial Average fell 281.76 points, or 0.85 per cent, to 32,920.46; the S&P 500 lost 43.39 points, or 1.11 per cent, to 3,852.36; and the Nasdaq Composite dropped 105.11 points, or 0.97 per cent, to 10,705.41.
Australian futures fell 27 points, or 0.38 per cent, to 18,210.
The benchmark S&P/ASX200 index finished Friday down 56.1 points, or 0.78 per cent, to 7148.7, its lowest close since November 21.
For the week, the index lost 64.5 points, or 0.89 per cent, its second straight losing week after gaining five out of the past six weeks before that.
-AAP
