Closing Bell 6th November: Investors rally behind ASX tech amidst economic optimism

Infrastructure Spending Cuts Proposed to Combat Inflation

Australian Treasurer Jim Chalmers has acknowledged the necessity to reduce infrastructure spending to alleviate economic overheating and tackle inflation. This comes as the Reserve Bank of Australia (RBA) is expected to raise interest rates. A federal review showed a $33 billion overrun in infrastructure projects, with plans to cut some spending to be announced by year’s end. The IMF has indicated that excessive spending is pushing the economy past its full capacity, necessitating further rate hikes by the RBA. Chalmers emphasized the need for tough decisions to address these overruns and inflation challenges. A deputy to RBA governor Michele Bullock is also to be appointed soon, with the next rate rise anticipated to be under her leadership.

Albanese Urges China for Fair Trade Practices

Prime Minister Anthony Albanese has called on China to engage in fair trade, suggesting that this would benefit the region and China itself. Despite China’s sanctions on Australian exports, Australia’s trade has hit a record high. Speaking at the China International Import Expo, Albanese stressed the importance of a rules-based trade system and the role of the World Trade Organisation in ensuring fair play and addressing trade issues. He expressed optimism that Beijing’s sanctions would eventually be lifted, enhancing trade relations.

Saudi Arabia and Russia Maintain Oil Supply Cuts Amidst Middle East Tensions

Saudi Arabia and Russia have confirmed their commitment to oil supply cuts until year-end, despite Middle East tensions affecting global markets. OPEC+ has reduced supply by over 1 million barrels per day, with Saudi Arabia cutting 1 million barrels of its daily production and Russia reducing exports by 300,000 barrels. The decision aims to stabilize markets, though it may be reassessed based on the evolving geopolitical landscape. High oil prices continue to be a concern for global inflation and economic stability, with the Saudis needing higher prices for ambitious projects and Russia requiring funds for its military actions in Ukraine.