29 June 2022
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5 Things you need to know today

Switzer Daily
16 June 2022

1. US rates hike big time
How has the stock market reacted to the US central bank lifting interest rates overnight by a big 0.75%? In fact, stocks went up on the news and the reason could be that the Fed actually leaked the likelihood of a bigger-than-usual lift in the official rate of interest, because of the larger-than-expected inflation jump reported last week. Stock markets don’t like shocks from left field, which is why stocks went up, but given the nervousness out there, this positivity mightn’t last.

2. Close to 2.8 million workers set for a pay rise
The minimum wage for 184,000 workers (or 1.6% of the workforce) will see a pay hike of 5.2% or more than a dollar an hour to $21.38 (or $40 a week), taking the base pay rate to $812.60. Meanwhile, 2.6 million workers (or 23% of the workforce) on higher-award pay rates, will pocket a lower 4.6% pay rise as long as the dollar increase equates to at least $40 a week.

Business leaders and economists say this will keep inflation up and ensure more interest rate rises.

3. Consumer confidence nosedive!
If the interest rate rises and the big stock market sell-off is worrying you, you’re not alone, with consumer confidence nationally nosediving.

Consumers were actually more spooked when the pandemic lockdown told us we had to stay home, but that aside, the current reading for the ANZ-Roy Morgan consumer confidence number is at its lowest level since the recession of 1990. By the way, this is what the Reserve Bank wants — it wants us scared so we cut back on our spending to reduce inflation, which is why economics is called the dismal science!

4. NSW and Victoria to roll out new preschool education format
In what is being dubbed “the greatest transformation of early education in a generation,” NSW and Victoria are set to introduce a full year of play-based learning before entering primary school.

The Victorian premier, Daniel Andrews, and his NSW counterpart, Dominic Perrottet, will on Thursday announce the joint long-term policy commitment.

“In the next 10 years, every child in Victoria and NSW will experience the benefits of a full year of play-based learning before their first year of school,” they said in a joint statement.

“A year dedicated to growing and learning, new friends and new experiences. A year devoted to helping our kids be the very best they can be. Giving them the skills they need for school, but just as importantly, the skills they need for life.

 “At the same time, it will benefit hundreds of thousands of working families. Helping more mums and dads return to work on terms that work for them.”

The program will consist of 30 hours a week of play-based learning for all four-year-olds and will be known as “pre-prep” in Victoria and “pre-kindergarten” in NSW.

The NSW budget will set aside more than $5.8bn over 10 years to introduce universal pre-kindergarten by 2030.

In Victoria, the program will be rolled out in 2025 as part of a $9bn overhaul of early childhood education over the decade. This includes making kinder free for all three and four-year-olds from 2023, saving families up to $2,500 a child each year. (The Guardian)

5. ASX to rise on Wall St sentiment
ASX futures were up 21 points or 0.3%, to 6627 near 6.30am AEST, with the AUD +2% to 70.10 US cents near 5.45am AEST.

On Wall St near 4pm: Dow +1% S&P 500 +1.5% Nasdaq +2.5%.

In Europe: Stoxx 50 +1.6% FTSE +1.2% CAC +1.4% DAX +1.4%.

10-year yield: US 3.28% Australia 4.19%.

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