First petrol, then milk: the next cost-of-living hit is coming

First petrol, then milk: the next cost-of-living hit is coming

News in brief

The preliminary auction clearance rate rose slightly over the weekend to 57.9 per cent. It was the big test for the market, with almost 2,000 homes going under the hammer and following a fortnight of big drops in sales. The latest result is okay, but nothing more.

 

Still in property, Australia’s commercial property market has effectively split in two. Office-heavy parts of the economy are showing signs of stress, while industrial and logistics property keeps powering ahead, according to new data from CreditorWatch.

 

The last seven days have been good for global markets, thanks to the US and Iran announcing a two-week ceasefire. The pause sent oil prices down around 13 per cent and Brent is sitting just under $US100 a barrel. The Aussie dollar is trading above 70 US cents while last week, gold, Bitcoin and copper all rose.

 

American big bank CEOs, the boss of the Federal Reserve Jerome Powell and Treasury Secretary Scott Bessent gathered in Washington late last week to discuss the destructive capabilities of Anthropic’s latest AI model, Claude Mythos.

 

Levi’s, a brand synonymous with shopping and denim jeans, has for the first time reported more sales direct to consumers, than via retailers. Levi’s third quarter results show that given the tariffs on imported products, it could lift its prices in the US and not lose customers.

Fear-o-meter

We have seen the impact of the war in petrol prices and experts are saying we are soon to see it in food prices. Within weeks we might notice it at the supermarket.

 

Global soft commodity prices have surged since the war in the Middle East. And they were already rising ahead of the turmoil due to poor growing conditions in many parts of the world.

 

This year, and particularly since the beginning of the war, there have been big jumps in prices of palm oil, cheese and milk. Soybeans, wheat, canola and rice have also risen.

 

Input costs have increased and fertiliser is getting harder to find. Almost 40 per cent of the world’s fertiliser passes through the Strait. National Farmers Federation boss Hamish McIntyre said locally, the turmoil was likely to hit milk prices first, and then fruit and vegetables, and then animal products.

 

That means the Reserve Bank will be standing by, ready to lift interest rates.

Fear & Greed Q+A today

On the week ahead for the economy, including the March labour force figures after February's jump from 4.1pc to 4.3pc:

 

"The volatility in this monthly series gives me headaches when I try to forecast the numbers — but we’ve got to try. From my observation, the market is expecting a basically flat unemployment rate, holding at 4.3%, with a modest increase in employment of around 25,000 jobs in March.

 

But it is March — that’s when we had the second rate hike and the start of the oil and petrol price shock. While that probably doesn’t have a big immediate impact on employment, it may have fed into how households responded to the survey.

It’s a very volatile series, but a plus 25,000 result would be solid — and a 4.3% unemployment rate would still be historically low.”

The US and Iran have failed to make headway in negotiations for peace, putting pressure on the increasingly fragile ceasefire, and on the global economy, which is likely to feed through to higher inflation and lower economic growth. US Vice President JD Vance left Pakistan yesterday having failed to win concessions the US sought from Iran over its nuclear power program. The all-important Strait of Hormuz remains closed to all vessels except the ones Iran wants to let through. The failure to reach agreement in Pakistan clearly frustrated President Donald Trump, who afterwards retweeted an article that suggested the US could blockade Iran to pressure the nation to make a deal.

Greed-o-meter

	Name	Sport	Age	Earnings $m
1	Oscar Piastri	Formula 1	24	57-59
2	Cameron Smith	Golf	32	44-46
3	Josh Giddey	Basketball	23	38-40
4	Dyson Daniels	Basketball	22	37-39
5	Jordan Mailata	American football	28	23-24
6	Josh Green	Basketball	25	20-21
7	Matisse Thybulle	Basketball	28	17-18
8	Marc Leishman	Golf	42	14-15
9	Jett Lawrence	Motocross	22	12-15
10	Alex de Minaur	Tennis	27	13-14

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Formula 1 driver Oscar Piastri is Australia's highest-earning sportsperson, raking in as much as $59m in just one year, according to a list compiled by Nine newspapers.

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Source: Nine newspapers