Key Points:

• The Reserve Bank of Australia (RBA) reduced the overnight cash rate by 25 basis points to 3.25% during the October board meeting.
  
  
• The 3 month Bank Bill Swap Rate fell again during October, in anticipation of a potential November rate cut, falling by thirty seven basis points (bps).
  
  
• The Australian 10 Year Bond yield rose, ending the month priced at a yield of 3.13%; however the yield on these bonds has fallen by 1.38% over the past 12 months.
  
  
• Australian Shares recorded a fifth consecutive month of positive growth, with the All Ordinaries Index rising 2.93%, while the S&P/ASX200 Index gained 2.96%.
  
  
• Australian Listed Property increased by 5.21% during October, as measured by the ASX 300 A-REITS Index. This index has now risen by 23.12% over the past 12 months.
  
  
• Most global equities markets, with the exception of the United States (S&P 500 Index -1.98%), performed well in during October with Hong Kong’s Hang Seng Index, leading all the major regional market indices rising by 3.85%. Despite the negative performance during October the S&P 500 Index has still increased by 12.68% over the past 12 months.
  
  
• Gold (-2.90%) and Oil (-6.45%) both fell during October, with the Oil Price having now fallen by 7.46% over the past 12 months. The broader commodities index as measured by the US$ CRB Spot Commodity Index fell by 4.25% and has also lost ground (6.68%) over the previous 12 months.
  
  
• The Australian Dollar (AUD) enjoyed relatively flat returns, increasing against the US dollar (0.03%) and British Pound (0.23%), whilst falling against the Euro (-0.83%). These returns indicate that investors were waiting on the Reserve Bank of Australia’s November announcement regarding interest rates before actively taking positions in the foreign exchange markets.

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Click here for a Market Report – 31st October 2012

Source:      Zenith Investment Partners