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Speaker 1: Today on Fear and Greed hopes arising that a low

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Speaker 1: inflation reading due out tomorrow could trigger a cut in

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Speaker 1: interest rates next month. Banks start using perks and cash

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Speaker 1: incentives to lure customers, and Donald Trump ridicules Denmark, alienates Jordan, Egypt,

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Speaker 1: and Columbia, but pleases China. All in about forty eight

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Speaker 1: hours plus, bad news for the Albanese government in the polls,

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Speaker 1: and the local auction market returns with a whimper. Welcome

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Speaker 1: to Fear and Greed. Daily business news for people who

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Speaker 1: make their own decisions. It is Tuesday, the twenty eighth

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Speaker 1: of January twenty twenty five. I'm Michael Thompson, and good morning,

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Speaker 1: Sean Aylmer.

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Speaker 2: Morning Michael. Back to business today.

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Speaker 1: I think, Yeah, it's funny, isn't It also feels after

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Speaker 1: the long weekend, everything kind of kicks back in. Though

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Speaker 1: you could almost say that Donald Trump gave everything a

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Speaker 1: bit of a jumpstart.

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Speaker 2: You know what I like he did. But what I

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Speaker 2: like about this time of year with respect to everyone

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Speaker 2: go to school. They're all going back to school, and

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Speaker 2: so we parents get a bit of routine back into

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Speaker 2: our lives. It does make things easier.

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Speaker 1: Yeah, it does feel like these holidays have been potentially

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Speaker 1: the longest in history, shown the main story this morning.

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Speaker 1: We should get a reasonably clear indication of whether or

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Speaker 1: not there's going to be an interest rate cut anytime

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Speaker 1: soon this week with the release of all important inflation

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Speaker 1: figures for the December quarter.

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Speaker 2: That's right, the Australian Bureau Statistics releases the December month

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Speaker 2: and the December quarter Consumer Price Index tomorrow CPI, Big,

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Speaker 2: big day. The headline rate will come in between the

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Speaker 2: Reserve banks target range of two to three percent. That's good.

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Speaker 2: We know that's going to be low because we have

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Speaker 2: these electricity rebates from the government. We've had lower public

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Speaker 2: transport costs. There's caps on childcare fees. There's a bunch

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Speaker 2: of things there that'll make sure that headline rate sits

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Speaker 2: between two and three percent. It's all about the underlying

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Speaker 2: rate though, Michael. That takes out all the stuff that's

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Speaker 2: volatile and gives us a real reading of what's happening

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Speaker 2: with prices. That's one that the Reserve Bank likes. So

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Speaker 2: for example, this quarter we've actually got lower housing costs.

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Speaker 2: Mean the actual national house prices fell during the December quarter,

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Speaker 2: so that may well be part of the underlying rate,

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Speaker 2: and that will drag that rate down. If for the

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Speaker 2: quarter it comes in at zero point five percent or lower,

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Speaker 2: then it's going to be really hard for the Reserve

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Speaker 2: Bank not to cut interest rates next month. According to economists,

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Speaker 2: if it comes into that zero point five percent for

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Speaker 2: the quarter, that makes it three point two percent for

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Speaker 2: the year, almost in the range. Think about zero point

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Speaker 2: five percent if that came in. If you add the

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Speaker 2: zero point seven percent or their abouts for the previous quarter,

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Speaker 2: you annualize it, it's only two and a half percent

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Speaker 2: if it comes in at zero point five percent times

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Speaker 2: by four, so the actual run rate for the full

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Speaker 2: year is only two percent. That is well and truly

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Speaker 2: within that two three percent target range. Now, Governor of

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Speaker 2: the Reserve Bank, Michelle Bullock has made it clear that

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Speaker 2: the bank will cut rates if it believes inflation is

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Speaker 2: sustainably heading to target. Zero point five percent is the

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Speaker 2: critical number. Zero point six percent probably too close to call,

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Speaker 2: and market economists reckon that the Reserve Bank would then

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Speaker 2: wait till May. Zero point seven percent or more, Well,

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Speaker 2: it's on hold.

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Speaker 1: This is obviously very important for homeowners Sean it's also

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Speaker 1: important for people with business loans. It is important for

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Speaker 1: many retirees, kind of on the flip side, for retiers

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Speaker 1: who like higher rates of course, and I suppose there

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Speaker 1: is another interested party in all of this. It is

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Speaker 1: extremely important for the prospects of the federal government being

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Speaker 1: re elected in coming months.

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Speaker 2: That's right now. The Prime Minist Anthony Albernezi yesterday said

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Speaker 2: he's confident of winning majority government at the next election,

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Speaker 2: despite falling in the polls. The latest The News poll

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Speaker 2: in The Australian shows that on a two party preferred base,

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Speaker 2: the Coalition is now in front fifty one to forty

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Speaker 2: nine percent. It shows a significant shifting sentiment over the

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Speaker 2: summer break. Not that easy for the coalition to actually

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Speaker 2: form government itself. So at the moment, the ALP holds

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Speaker 2: seventy eight seats in the one hundred and fifty one

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Speaker 2: seat House of Reps. Coalition's got fifty five, Greens have

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Speaker 2: got four, Cata's Australia Party's got one, the Center Alliance

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Speaker 2: has got one and Independence have twelve. The reality is

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Speaker 2: that it's very very unlikely that the coalition can gain

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Speaker 2: enough seats to form a majority. They've only got fifty

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Speaker 2: five they're going to need a lot more, basically twenty

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Speaker 2: more to form a majority. The best tape for them

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Speaker 2: is a minority government with the help of some of

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Speaker 2: the independents and Bob Catter those sorts of people, the

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Speaker 2: government could form a majority government, but markets suggest it's

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Speaker 2: probably going to be a minority government now. That means

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Speaker 2: they're going to have to do deals with the Greens,

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Speaker 2: the Teals, all those other independents. Those people will become

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Speaker 2: very important. Bringing this back to the inflation outlook, if

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Speaker 2: inflation comes in at zero point five percent and the

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Speaker 2: Reserve Bank starts cutting interest rates, well, that will certainly

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Speaker 2: swing the mood of some voters. If we get a

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Speaker 2: rate cut in February, or there's confidence that will get

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Speaker 2: one in May, then that will not only play into

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Speaker 2: the government's popularity, it'll also probably play into when there's

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Speaker 2: an election called. So what's happening tomorrow on the CPI

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Speaker 2: is critical not just for the economy but for politics

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Speaker 2: as well.

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Speaker 1: So we could realistically end up with a minority government. Again,

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Speaker 1: we haven't have we we haven't had one.

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Speaker 2: I'm going to get this rank so since.

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Speaker 1: Twenty ten because it wasn't it was Gillard, Tony windsor

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Speaker 1: Rob oak shot they were the turn to Bob Catter

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Speaker 1: went with Tony Habit. Was he the opposition leader of.

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Speaker 2: The time, Yes, yes, yes, yes, yes, yes, yes he

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Speaker 2: was the assicition leader.

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Speaker 1: I suppose we had a lot of turnover of leaders

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Speaker 1: during that per so, you know what, I think we

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Speaker 1: can be forgiven, but goodness me, that was a tumultuous period.

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Speaker 2: But what was interesting that minority government, and some of

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Speaker 2: this comes down to Julia Gillard herself, that got a

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Speaker 2: lot of legislation through good point. And the thing about

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Speaker 2: that is that they had to negotiate with minority parties

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Speaker 2: and in some ways that is easier than trying to

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Speaker 2: negotiate just with the Greens of the coalition or labor,

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Speaker 2: depending on who's in government. So it's not the worst

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Speaker 2: possible outcome for a country.

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Speaker 1: No, no, you're right there. Sean local markets they were

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Speaker 1: closed yesterday for the Australia Day holiday. But plenty going

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Speaker 1: on internationally and unsurprisingly Donald Trump is having a fair influence.

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Speaker 2: Yeah. So over the weekend he suggested that maybe the

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Speaker 2: US would take a softer stance on tariffs in China.

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Speaker 2: Not surprisingly no details there, but he said, you know,

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Speaker 2: he was thinking about it, and maybe it will take

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Speaker 2: a little bit more time. He also called for interest

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Speaker 2: rates to fall in the US. He said he knew

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Speaker 2: more about interest rates than the Federal Reserve and he

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Speaker 2: wants rates to fall. His words a lot. That sent

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Speaker 2: the US dollar lower. In fact, the US dollar had

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Speaker 2: its worst week since July twenty twenty three last week.

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Speaker 2: That helped the Aussie dollar that's back to around sixty

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Speaker 2: three US since Trump's comments also put downward pressure on oil,

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Speaker 2: with Brent crude back at seventy eight US dollars a barrel,

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Speaker 2: which hopefully should be good for US at some point

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Speaker 2: in the future in terms of petrol prices.

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Speaker 1: Yeah, that'd be nice, Sean. After the show, We're still

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Speaker 1: got plenty more to come, so don't go anywhere just yet.

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Speaker 1: But after the show, we have an interview coming up.

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Speaker 1: This one is an absolute cracker. You were speaking with

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Speaker 1: Lucy Liu, who is the co founder and president of

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Speaker 1: air Wallacks.

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Speaker 2: So I don't think I've had many interviews in my

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Speaker 2: life that have been so honest. So Lucy lu just

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Speaker 2: tells it how it is. Air Wallocks is an incredible

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Speaker 2: success story started in twenty fifteen. It basically facilitates. Initially,

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Speaker 2: it facilitated the transfer of currency between currencies, so you

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Speaker 2: buy goods in one currency and pay for it in

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Speaker 2: another currency. And it used to compete on price. That's

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Speaker 2: where it started. It has grown and it's got all

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Speaker 2: sorts of products for businesses and individuals. And Lucy tells

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Speaker 2: us the whole story how we got to this point

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Speaker 2: where it sees its future. We talk about whether or

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Speaker 2: not they're going to list, and Lucy is very very upfront.

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Speaker 2: She doesn't try and hide from anything.

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Speaker 1: And look for that reason alone, I would say listen

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Speaker 1: to this interview because look, a lot of guests are

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Speaker 1: very diplomatic around kind of questions when you ask them. Lucy, though,

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Speaker 1: is just straight up. And Lucy is only in our thirties,

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Speaker 1: very young, very very very very impressive business leader.

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Speaker 2: I loved it. Yep.

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Speaker 1: Anyway, it's great, definitely worth a lesson coming up after

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Speaker 1: the show, Sean, don't go anywhere. We'll be back in

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Speaker 1: a moment with the rest of the day's business news sewn.

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Speaker 1: The big banks are using perks and cash back offerings

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Speaker 1: to lure customers as competition between all the banks really

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Speaker 1: heats up.

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Speaker 2: That's right. So deposit and everyday transaction accounts are becoming

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Speaker 2: much more competitive. That's what happens when interest rates are

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Speaker 2: set to fall. Remember if you can actually use a deposit.

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Speaker 2: If I'm a bank and I've someone put a deposit in,

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Speaker 2: I can then on land that it's a really cheap

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Speaker 2: way to get funding. So all of a sudden they

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Speaker 2: want our deposits. Banks for offering sign on money, referral cash,

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Speaker 2: ongoing discounts, rebase reward points, donations, all sorts of things.

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Speaker 2: According to analysis by can Star, which was done for

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Speaker 2: the Australian. A few examples that I particularly like. So

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Speaker 2: Heritage Bank's offering new customers fifty bucks when they sign

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Speaker 2: up and open a simple access account. Westpac is giving

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Speaker 2: immigrants who arrive in the part who have arrived in

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Speaker 2: the past year fifty dollars for opening a choice account

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Speaker 2: and depositing one hundred dollars or more. Bank of Queensland,

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Speaker 2: it owns Virgin Money. It's giving new customers five thousand

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Speaker 2: Virgin points when they open and go account and make

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Speaker 2: a debit transaction. And I like this one. Tasmania's Bank

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Speaker 2: of Us, which is a customer owned institution. It pledges

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Speaker 2: to donate one percent of the account's average annual balance

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Speaker 2: to a chosen community organization. A lot of competition in

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Speaker 2: that deposit market used to be in the mortgage market.

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Speaker 2: Only A and Z now do those cash backs in

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Speaker 2: the mortgage market. The others have gone off that, but

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Speaker 2: plenty of competition in the deposit market.

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Speaker 1: Can we talk housing sea, can we talk auctions?

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Speaker 2: Ow, it's time, yes, yes.

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Speaker 1: We haven't done this yet in twenty twenty five, and

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Speaker 1: really after what would you describe at the end of

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Speaker 1: last year. I was looking for the best word to

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Speaker 1: describe it and really teppered.

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Speaker 2: Lukewarm, lukewarm, teppid, disappointing.

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Speaker 1: Yeah muh. The housing auction market kicking off again at

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Speaker 1: four hundred homes going to auction over the past week,

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Speaker 1: so it's kicking off slowly, yees.

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Speaker 2: The preliminary clearance rate nationally was sixty four point three percent,

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Speaker 2: which is fairly low, but not a lot. You can

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Speaker 2: read into that because only four hundred homes went to market.

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Speaker 2: Melbourne was busiest. They came in at sixty four point

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Speaker 2: six percent. Sydney had very few homes up for sale.

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Speaker 2: Its early clearance rate came in at fifty nine point

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Speaker 2: four percent. Adelaide had about the same number of homes

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Speaker 2: up for sale as Sydney, and it was seventy six

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Speaker 2: point one percent of two few in the other city.

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Speaker 2: So you know, a teppid end to last year and

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Speaker 2: a tempered start. Now, in case people have had a long,

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Speaker 2: long holiday, I think it's worth recapping what happened last

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Speaker 2: year Over twenty twenty four, Melbourne, Hobart and the act

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Speaker 2: went backwards. Perth was the best, up nineteen percent. Adelaide

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Speaker 2: and Brisbane were very strong. Sydney was up five six

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Speaker 2: percent or so, though it was going backwards at the

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Speaker 2: end of the year. Average home values were up nearly

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Speaker 2: five percent last year. Now for a median value which

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Speaker 2: is across all markets about thirty eight thousand dollars, and

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Speaker 2: regions did better than combined Capital City index. So that

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Speaker 2: whole discussion about whether it was tempered or muh at

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Speaker 2: the end of last year. This puts that into context.

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Speaker 2: Wasn't that way in Perth, Adelaide or Brisbane certainly was

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Speaker 2: everywhere else?

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Speaker 1: Yeah, that Perth figure is just extraordinary, isn't it. Yea,

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Speaker 1: And you've talked about that before, about the fact that

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Speaker 1: this happens, that this that Perth is one of those

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Speaker 1: markets that just has these epic kind of booms over

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Speaker 1: a long period of time, but still nineteen point one

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Speaker 1: percent across the year, it's quite spectacular.

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Speaker 2: Sean.

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Speaker 1: We've spoken before on the show about the rising price

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Speaker 1: of coffee and cocoa, which is why the flat wire

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Speaker 1: and your Cadbury's bar is so expensive at the moment.

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Speaker 1: Another soft commodity in the grip of rising prices is

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Speaker 1: orange juice.

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Speaker 2: What was that movie now that I'm trading places? Eddie

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Speaker 2: Murphy was in it. Yes, yes, and there was a

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Speaker 2: one dollar bet between two rich owners about what was

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Speaker 2: going to happen to orange juice prices? Am I right?

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Speaker 2: I think that's right?

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Speaker 1: Yep, yep, that's it. Yeah, and ever since then, and

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Speaker 1: that was what in the eighties, Yeah, I suppose so, yeah,

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Speaker 1: it's you just don't think of orange juice as a commodity,

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Speaker 1: do you think of it was something you have at breakfast?

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Speaker 2: That's right. And the funny thing about orange juice, there's

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Speaker 2: huge demand for orange juice, and therefore it's investable and

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Speaker 2: that's why it trades. And that's why we actually worry

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Speaker 2: about orange juice prices. It's another soft commodity, which about

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Speaker 2: hard commodities like metals and minerals and soft commodities like

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Speaker 2: cocoa and coffee and orange juice. It's up about forty

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Speaker 2: percent over the last year. You know, it peaked in

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Speaker 2: September last year, but right now it's still five times

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Speaker 2: pre COVID levels. This is where climate change hits the

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Speaker 2: breakfast table almost well not literally, but there it's a

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Speaker 2: direct correlation. So orange juice, well, it's actually frozen orange

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Speaker 2: juice futures. They're traded on the Intercontinental Exchange, which is

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Speaker 2: in the US. There is huge demand for them now.

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Speaker 2: Basically it's all about what happens in the US and Brazil.

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Speaker 2: Nine percent of the US crop is in Florida. They're

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Speaker 2: in recent years hit by hurricanes in recent seasons, then

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Speaker 2: really cold weather. Brazil's the world's biggest producer. About two

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Speaker 2: years ago was exporting record volumes. Hit by a drought.

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Speaker 2: It's been hit by citrus disease that's also hit some

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Speaker 2: of the Florida crops as well. China and Mexico were

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Speaker 2: also very big in citrus, oranges and lemons, and limes

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Speaker 2: and things like that, But really the price depends on Brazil.

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Speaker 2: In the US, the impact of climate change in those

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Speaker 2: economies has pushed or really hurt production, pushed prices through

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Speaker 2: the roof. And that's why when you go to the

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Speaker 2: shopping center and you buy your orange juice, it's just

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Speaker 2: more expensive than it used to be. There you go.

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Speaker 1: My favorite soft commodity is a form of kind of

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Speaker 1: pork features. Refer to it as as lean hog. Like,

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Speaker 1: that's it's kind of cool, don't you think lean hog?

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Speaker 2: Maybe? Do you know much about it? Do you know

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Speaker 2: much about lean hog prices?

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Speaker 1: No? No, look, I know that the name is very cool.

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Speaker 2: Can I can I go? Like, let's let's in the

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Speaker 2: next few weeks do a lean hog story. Yeah?

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Speaker 1: Please do. I will hang out for that one. Sean,

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Speaker 1: I'm very excited. International news time. Now, enough about orange juice,

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Speaker 1: enough aboutlean hoggs. Let's get serious. Donald Trump has started

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Speaker 1: using sanctions against countries not bending to his will, ordering

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Speaker 1: his administration to impose tariffs and sanctions on Columbia hours

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Speaker 1: after it's left as president refused to allow two military

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Speaker 1: planes carrying deported migrants to land. This is this is

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Speaker 1: getting serious.

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Speaker 2: It's getting very serious. The new president is showing that

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Speaker 2: he's prepared to use economic tools to get his political

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Speaker 2: and social policies through. So initially the tariff on Columbia,

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Speaker 2: which has been instituted pretty much immediately, is twenty five percent.

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Speaker 2: By the end of the week, he said it will

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Speaker 2: go up to fifty percent. Columbia sells oil, gold, coffee,

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Speaker 2: and flowers. They are the main things it sells into

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Speaker 2: the US. Not a huge training relationship, but significant. Nonetheless

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Speaker 2: that he's just put in twenty five percent tariff than

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Speaker 2: a fifty percent tariff. Columbia has come back and put

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Speaker 2: on tariffs on US goods just as quickly. Columbia and

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Speaker 2: the US of allies their friends have been for years,

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Speaker 2: the drug Wars and Columbia, which have effectively been one.

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Speaker 2: They were one with the help of the US. The

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Speaker 2: two have worked closely together. Donald Trump's just shown that

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Speaker 2: he isn't really considering old friendships, which is something that

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Speaker 2: Australia should keep in mind. Also over the weekend, Donald

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Speaker 2: Trump suggested mass deportation of about two point three million

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Speaker 2: Palestinians out of that Gaza region to Egypt and Jordan.

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Speaker 2: Egypt rejected that pretty much immediately. He ridiculed that Denmark's

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Speaker 2: efforts to defend Greenland from the U. S. Yes, in fact,

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Speaker 2: his quote, they put two dogs sleeds there two weeks ago.

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Speaker 2: They thought that was protection pretty condescending. Then over the weekend,

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Speaker 2: as I mentioned earlier, he said he's inclined not to

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Speaker 2: put tariffs on China immediately. Mass deportation is in full swing.

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Speaker 2: Chicago seems to be the center of what's going on

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Speaker 2: at the moment. Some illegal immigrants have arrived home in

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Speaker 2: Central American countries in shackles, literally in shackles. Now the

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Speaker 2: ones going to Columbia didn't make Columbia, and in fact

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Speaker 2: they were being carried on a military aircraft. In the

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Speaker 2: Colombian president said we're not allowing US military aircraft into

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Speaker 2: our airspace. Churches and schools have been raided, and now

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Speaker 2: traditionally churches and schools have been off out of the

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Speaker 2: target area for these sorts of raids. Well no more.

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Speaker 2: Certainly Chicago churches and schools have been raided. The Administration

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Speaker 2: for its apartment has been criticized for doing all this

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Speaker 2: has basically said, we're sending a clear message, we're showing

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Speaker 2: that we're serious about it, and no doubt there's a

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Speaker 2: clear message they're serious about it, but you wonder about

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Speaker 2: the compassion sometimes.

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Speaker 1: Finally, Sean, the US government is working on a plan

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Speaker 1: to save TikTok in the US. It involves asking software

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Speaker 1: company Oracle and a group of outside investors to effectively

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Speaker 1: take control of the apps operations.

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Speaker 2: Under the deal being negotiated by the White House, TikTok's

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Speaker 2: China based owner, by Dance, would retain a stake in

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Speaker 2: the company, but data collection and software updates would be

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Speaker 2: overseen by Oracle. According to a Ruyter's report, Oracle already

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Speaker 2: provides a foundation of TikTok's web infrastructure. The whole data

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Speaker 2: play was the reason that TikTok Usa was banned in

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Speaker 2: the beginning the reports. There's others interested in include an

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Speaker 2: investor group led by billionaire Frank McCourt. Now, Michael, you'll

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Speaker 2: probably think Angela's ash is the Irish writer. No, no, no,

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Speaker 2: he's commercial real estate guy. There's another one consortium talking

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Speaker 2: apparently fronted by Jimmy Donaldson. Now do you know, mister

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Speaker 2: beast the YouTube.

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Speaker 1: It's a bit hard to avoid, mister beast.

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Speaker 2: It is very hard to avoid. Mister beast that is

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Speaker 2: Jimmy Donaldson. And so this talk that he wants to

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Speaker 2: take over TikTok. He's a phenomenon that blow.

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Speaker 1: Yeah. Yeah, an extraordinary success story, one of the most successful,

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Speaker 1: probably actually almost the most successful YouTube personality with longevity.

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Speaker 2: Yes, yeah, not long.

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Speaker 1: A quick fad. He's been around for a long time

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Speaker 1: and it has made an absolute fortune. And he's given

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Speaker 1: a lot of money away, a lot of big promotions

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Speaker 1: that he runs, gives away cars and all those kinds

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Speaker 1: of things. And that would be interesting.

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Speaker 2: If o TikTok yep.

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Speaker 1: Wow, all right, Sean. Up next, Fear and Greed Daily Interview.

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Speaker 1: Check it out. Lucy Lou, co founder and president of

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Speaker 1: air Wallax, a great supporter of this podcast. That's coming

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Speaker 1: up in the Fear and Greed playlist on your podcast

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Speaker 1: platform or at Fearangreed dot com dot are you And

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Speaker 1: at midday there is an episode of Ask Fear and

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Speaker 1: Greed where we answer listen to questions. Today's question is

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Speaker 1: a very topical one actually relating to inflation, which is

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Speaker 1: coming out. The data is coming out tomorrow.

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Speaker 2: Thank you very much, Sean, Thank you, thank you.

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Speaker 1: Michael It is Tuesday, the twenty eighth of January twenty

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Speaker 1: twenty five. Make sure you're following the podcast and please

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Speaker 1: join us online on LinkedIn, Instagram, x TikTok, and Facebook.

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Speaker 1: I'm Michael Thompson and that was fear and greed. Have

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Speaker 1: a great day.