- Geopolitical tensions between US-China appeared to thaw; a resumption in high-level military communications was agreed at the Biden-Xi meeting.
- Temporary ceasefire in the Middle East allowed for an exchange of hostages, assisting investment markets to take a more positive stance.
- Australian stock market had a stellar month, providing a return of +5.0%.
- Global equity markets rebounded by +4.5%(unhedged) in November, as did global bonds +3.2%. Global stocks recorded their strongest month in three years, nearly retracting their summer losses, in a broad-based rally that saw cyclical sectors outperform.
- Bond yields declined sharply; the US 10-year note yield fell by 60bps, delivering the best monthly return in more than 10 years.
- Other good news in November came from the commodities sector, Brent Crude oil prices fell for a second month in a row – despite further OPEC+ production cuts – to US$82.83 p/b, while gold remained above US$2,000.
- US Federal Reserve left its target interest rate range unchanged at 5.25 – 5.50% – a second consecutive pause – but Powell did not rule out further rate hikes.
- The UK economy stagnated in Q3, defying expectations of a contraction. With UK inflation headline inflation (CPI) falling by more than 2% to 4.6% in October.
- Euro area headline (CPI) and core inflation (CPI minus components that exhibit large fluctuations month to month) declined further in November, to 2.4% and 3.6% respectively.
- As widely expected, the Reserve Bank of Australia Board (RBA) increased the official Cash Rate by 0.25% pa to 4.35% at its November meeting. Annual inflation in Australia fell to 4.90% in October from 5.60% in September.
- The RBA is one of a few central banks still lifting interest rates, and where market expectations are, we may possibly see a further move higher.
- The Australian dollar recovered toward 0.62 as investors reassessed US monetary policy settings in 2024 and moved toward expectations of lower rates, thereby lessening the appeal for the US dollar.