Oil, gold set to surge after US strike; house prices flatline; PM take popularity hit
News in brief
The outbreak of conflict in the Middle East is set to hit financial markets, with investors likely to head for safety. That should push up gold and oil prices, and defence and energy stocks should also benefit.
House prices rises have flatlined in Sydney and Melbourne, while Perth keeps surging, ahead of likely interest rate hikes later in the year. Brisbane and Adelaide are also strong performers, according to Cotality.
Anthony Albanese has copped a hit to his personal popularity in the latest Newspoll from The Australian, as Angus Taylor stems the Coalition’s electoral bleeding and One Nation’s rise stalls.
One of the great corporate battles over the past couple of years has been Coles v Woolworths. They have competed on price, suppliers, customers and with the corporate regulator. It is fair to say Coles had been winning the battle, but the tide looks to be turning.
Paramount Skydance is set to buy Warner Bros Discovery, after its $US111 billion bid for the Hollywood studio prompted the other buyer in the market, Netflix, to walk away.
Fear-o-meter
Until the removal of the Shah in 1979, politics and religion were clearly delineated in Iran and it was one of the most prosperous countries in the region.
Only when Ayatollah Ruhollah Khomeini took control, and US President Jimmy Carter carries some of that blame, did clerics, for the first time ever, run government.
Iran has very few friends in the region. Iraq and Iran had an eight-year war in the 1980s. Neighbours in the east like Turkmenistan, Afghanistan and Pakistan are predominantly Sunni Muslims. At least 90 per cent of the Iranian population are Shia Muslims, making it the world’s largest Shi’ite country. But it also means Iran is not close to its Muslim neighbours.
Iranians are Persians, not Arabs, so raining bombs in on Doha and Dubai means attacking another ethnic clan.
There is little sympathy anywhere for the leadership of the country, and that’s a reason why markets think this will be a short war.
But who will replace Ayatollah Ali Khamenei, who was killed over the weekend? Will it be a cabal of anti-Israel, anti-US leaders, or will more moderate elements do a deal with the west take control? That is where the risk lies.
Fear & Greed Q+A today
On the week ahead for the economy, including the all-important GDP data: Australia's economic scorecard.
“Look, we’re probably getting a confirmation that the economy did recover. These are December quarter numbers. So some people might say, look, they’re a bit ancient history, but they do build the foundations for kicking off 2026, even though they’re December quarter. What was the momentum on bottom line economic growth through 2025?
I think it’s fair to say that the broad consensus is that we’re going to get a reasonable result. Something around 0.7 per cent GDP growth for the December quarter, which would lift your annual growth rate to around about 2.3, 2.4 per cent. Depends on revisions… but it’ll be a situation where the economy is growing at close to 2.5 per cent, put it that way, which is at or even slightly above our potential GDP growth pace. It’ll be the strongest number since the pandemic.”
Hundreds of Australian travellers are stranded, and equity markets are set for a rocky start to the week following the assassination of Iranian Supreme Leader Ali Khamenei by US and Israeli forces over the weekend. US President Donald Trump said he had ordered the strike because of imminent threats posed by the regime. Iran responded by attacking Israel, Doha and Dubai – areas considered relatively safe, certainly for that part of the world. Iran warned there would be further bombings in the region, and Trump said if that went ahead, Iran would be hit with a force never seen before. He called on Iranian people to rise up and for government forces to surrender.
Greed-o-meter
Forwarded from a friend? Sign up to our daily newsletter