Economics

On Wednesday, gold and oil prices surged as reports emerged of Israel's preparations for a potential invasion of Gaza.

The Federal Government has added an additional $2 billion in subsidies, creating a $4 billion fund for Australian miners and exporters of critical renewable minerals, particularly battery materials. This fund will support both large and small miners, as well as those developing specialized devices for renewable technologies.

For the fourth time since becoming Reserve Bank Governor, Michell Bullock has emphasised the central bank's policy primacy in controlling prices by raising interest rates if inflation proves challenging to reduce.

Tech giants Microsoft and Alphabet (Google) have delivered strong quarterly results, potentially easing investor concerns about the megatechs' ability to support the broader Wall Street market.

In a bold move that underscores their commitment to the future of fossil fuels, the two largest American oil companies, Chevron and ExxonMobil, have embarked on a race to secure petroleum reserves, defying predictions that global oil demand will peak by 2030. These multibillion-dollar transactions have set the stage for a seismic shift in the energy industry.

The US Department of Justice is reportedly expanding its inquiry into Tesla's business practices, adding to the pressure on Elon Musk and the company's board.

Despite oil prices reaching multi-year highs, Chevron Corp announced on Monday its intention to acquire its smaller US rival, Hess Corp, in a $53-billion all-stock deal.

Chile's global lithium giant, SQM, continues to enhance its Australian holdings, having recently acquired a 30% stake in the Calidus Resources Pilbara lithium project. This move marks the latest in a series of deals in 2023 that have seen SQM aligning with promising lithium projects and their promoters.

Gold, oil, and interest rates dominated commodity markets last week as all three surged for a mixture of reasons. The US dollar was stronger as well, yet the stronger greenback and higher rates failed to have their usual negative impact on the prices of these two key commodities.

Last week's 'me too' ASX sell-off, following Wall Street's decline, is expected to persist today, with the futures market projecting a 65-point drop as trading resumes this morning.

Interest rates are once again in the spotlight this week, with two public appearances by the new Reserve Bank Governor, Michelle Bullock, and two crucial updates on inflation. Despite a surge in bond yields last week, the possibility of a rate increase at the Melbourne Cup meeting of the Reserve Bank board is not set in stone.

Last week, US bond yields surpassed 5%, jumping 30 points in just a week. This week, interest rate concerns are poised to remain the primary driver of market dynamics, with significant contributions from tech giants such as Amazon, Meta, and Alphabet.

Crunch week this week and next, as the six of the so-called "Magnificent Seven" stocks – Apple, Microsoft, Alphabet, Amazon, Nvidia, and Meta Platforms – release their latest quarterly figures.

US 10-year bond yields came within a hair’s breadth of breaching the 5% level on Thursday, and gold futures prices moved closer to the $2,000 level after Fed Chair Jay Powell again underlined that the central bank would be “resolute” in its commitment to the 2% inflation target.

Tesla's results for the three months ending in September weren't impressive, especially when compared to Netflix, which pleasantly surprised the market. However, they managed to partially reverse the nearly 5% slide in the electric vehicle (EV) maker's shares during regular trading, with a modest 1.3% rebound by 8:30 am Sydney time.

China's crude steel production plummeted to an eight-month low last month, as demand from the property and construction sectors remained feeble, keeping profit margins under pressure.

Glencore has announced the closure of its copper mining operations in Mount Isa by the end of 2025, resulting in the loss of approximately 1,000 jobs. However, the company plans to maintain its refinery and smelters in North Queensland.

Once again, the strength of consumer demand and buying has caught market economists and analysts off guard, resulting in a significant miss in their estimates of US retail sales for September.

A nervous Reserve Bank board has its hand on the interest rate lever, ready to push the cash rate up to 4.35% at the Melbourne Cup meeting on November 7 if it feels inflation is getting out of hand.

Despite a surge in petrol prices, New Zealand's consumer price inflation sharply slowed in the September quarter, effectively dispelling market speculation about the central bank's need to raise interest rates again.

In a strategic move that underscores Canada's commitment to electrifying its automotive landscape, Umicore Rechargeable Battery Materials Canada Inc. has inked a monumental deal with the Governments of Canada and Ontario.

Major Wall Street banks are anticipating a significant decline in the euro, with expectations that it could reach parity with the US dollar. This forecast comes as geopolitical tensions in the Middle East threaten to increase Europe's imported energy costs, and concerns over higher borrowing costs weigh on the eurozone's economic prospects.

Lower-than-expected claims (and consequently, payouts) stemming from cyclones in Vanuatu earlier this year have prompted Tower, the New Zealand insurer, to revise its earnings guidance for the year ending on September 30.

African gold miner, Resolute Mining (ASX:RSG), used the opportunity presented by a bullish three-year update released on Friday evening to downplay a reduction in guidance for its 2023 financial year, ending December 31.

Barrick Gold has received clearance to revive its Pogera gold mine in Papua New Guinea, which had been closed for three years due to a dispute with the country's government over benefit-sharing.

Newcrest's (ASX:NCM) time as an independent company is dwindling, with just a few weeks left following an overwhelming shareholder vote in favor of the $A26.2 billion merger with US gold mining giant Newmont.

Once again, China's imports of key commodities tell us a lot about the health of demand and economic activity – not very healthy, but not dead.

In the week ahead, investors have a lot to digest. There's ongoing conflict in the Middle East, Australian job data, remarks from the new Reserve Bank chief, a speech by Fed Chair Jay Powell, and US retail sales figures. Additionally, there's the aftermath of the Voice referendum loss in Australia, the NZ elections and a change in government, China's latest economic data, and GDP figures for the September quarter, along with the Polish parliamentary elections and quarterly reports from around the world.