Market Update – December 2014

1. The RBA held the overnight cash rate steady at 2.50% in December.
2. Domestic yields fell over the month, with the 3 Month Bank Bill Swap Rate and the 10 Year Australian Bond Yield decreasing by -0.10% and -0.29% respectively.
3. The Australian Share Market had a good month, with the All Ordinaries Price and the S&P/ASX 200 Index increasing by 1.71% and 1.84% respectively.
4. Australian Listed Properties outperformed the broader equity market, gaining 2.86% over the month.
5. Many global equities markets posted negative returns in December, with the FTSE 100 (UK) Index losing -2.33% to be the weakest performer.
6. Gold prices in US$ recovered by 0.37% over the month, taking its past year loss to -1.78%.
7. Oil prices continued to drop, with the Texas Crude Oil US$ Index decreasing by -19.47%, taking its past year loss to -45.87%. The overall US$ CRB Spot Commodity Price Index fell by –3.72% in December.
8. The Australian Dollar continued to depreciate against most major currencies over the month. In particular, it fell by -3.40% against the US Dollar, -1.11% versus the Euro, -2.50% against the British Pound and -2.38% against the Japanese Yen.
9. The Australian Trade Weighted Index (TWI) fell by -2.49% in December, indicating a decrease in international competitiveness.
10. Corporate debt spreads widened by 3.42% over the month, as measured by the iTraxx Australia Index.
11. US equity market volatility spiked by 5.87%, ending the month priced at 19.20%, as measured by the S&P VIX Index.

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Source:       Zenith Investment Partner