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International News (Issue 432)- 20 January 2017  

There was quite a bit of noise out internationally this week, with perhaps the most relevant being comments from the Federal Reserve Chairwoman Janet Yellen.

She commented that it makes sense to gradually reduce the monetary accommodation on offer given  the Fed were very close to achieving their goals of full-employment and 2%+ inflation.

The market is currently pricing in only two rate hikes in the US, but it would seem perfectly plausible to expect three if the US economy’s recent strength continues well into 2017.

Any sign of a faster pace from the Federal Reserve in their tightening phase would clearly be helpful for Australia’s economy since it would likely allow the Australian Dollar to ease back under 70c as we expect.

Chinese GDP for the 4th Quarter came in slightly stronger than anticipated at +6.8% annualized, but amusingly this data release comes a day after confirmation from one of China’s provincial governments that it had faked its economic data and growth rate for several years.

Many investors and economists have questioned the validity of Chinese economic growth rates for several years now, so this admission was enough to cause a wry smile among many of the cynics.

 

Index Change %
U.S. S&P 500 2264 -6 -0.3%
London’s FTSE 7208 -84 -1.2%
Japan’s Nikkei 19072 -63 -0.3%
Hang Seng 23050 +221 +1.0%
China’s Shanghai 3101 -18 -0.6%

 

 

Disclaimer:
This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.

 

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