Key Points:

• The RBA kept the overnight cash rate steady at 3.00% in its first meeting of 2013.
• Three month Bank Bill future yields ended the month 8 basis points (bp) higher, indicating the market sentiment that a rate cut would be unlikely.
• Ten year bond yields also rose, ending the month 18 bp higher at 3.45%.
• Australian Shares continued their recent rally, with the All Ordinaries Index price rising by 5.07% for the month while the S&P/ASX 200 price gained 4.94%.
• One of the strong contributors to this rally has been Australian Listed Property which gained 4.27% during the month, bringing the twelve month price return to 23.77%.
• Regional Shares also saw positive returns during January. Leading the gainers was the TOPIX (Japan) which gained 9.36%, while the FTSE 100 (UK) also performed well ending the month 6.43% higher.
• The STOXX 50 (EUR) and the Hang Seng (Hong Kong) didn’t perform as well as other major markets yet still posted positive returns, gaining 2.70% and 4.73% respectively, for the month.
• US Equity volatility declined by 3.74%, as measured by the VIX index, gradually steadying over the past 12 months to end 5.16% lower.
• Global Commodities saw mixed results in January with the price of gold declining by -0.70% while Crude Oil gained 6.18%. Overall, Commodities gained 1.54% as measured by the CRB Spot Commodity Index ($US).
• The Australian Dollar gained against most major currencies, rising by 6.02% as the Japanese Government announced radical proposals to curb ongoing deflation of the economy. The AUD also gained against the US Dollar, 0.52%, and the British Pound, 2.85%, however it depreciated by 2.35% against the Euro.

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 Source:       Zenith Investment Partners