Jan 20, 2017 | Investment Advice

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.

U.S. S&P 5002264-6-0.3%
London’s FTSE7208-84-1.2%
Japan’s Nikkei19072-63-0.3%
Hang Seng23050+221+1.0%
China’s Shanghai3101-18-0.6%

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