RBA Leaves Rates On Hold

The Reserve Bank of Australia has unsurprisingly left interest rates on hold, despite the Australian property market’s record start to 2021.

The measures are in place to support the economy needs as it transitions from the recovery phase of the COVID pandemic, to the expansion phase – despite the current lockdown measures in place in various parts of the country.

In his monthly statement, the RBA governor, Dr Philip Lowe, indicated the economic recovery in Australia is stronger than expected and is now forecast to continue on this trajectory.

“The outlook for investment has improved and household and business balance sheets are generally in good shape,” said Dr Lowe.

On housing markets, the statement commented on the prices rising in all major markets reiterating past statement sentiments.

“Given the environment of rising housing prices and low-interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”

“The Board remains committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.”

Elsewhere, the labour market has strengthened – unemployment now down to 5.1% in May alongside a decline in underemployment and labour force participation at around record highs.

However, the RBA is still cautious, Dr Lowe stating: Despite the strong recovery in jobs and reports of labour shortages, inflation and wage outcomes remain subdued. While a pick-up in inflation and wages growth is expected, it is likely to be only gradual and modest

The Chinese owner of bargain app Temu reported slower quarterly profit and revenue growth, capping a turbulent year for the e-commerce giant as it faced stiff competition at home, geopolitical tensions abroad and U.S. tariff uncertainties.

PDD Holdings on Thursday said fourth-quarter revenue climbed 24% to 110.61 billion yuan, equivalent to $15.30 billion, missing a Visible Alpha estimate of 117.83 billion yuan. It was the slowest pace of growth since the first quarter of 2022.

Net profit rose 18% from a year earlier to 27.45 billion yuan, topping analysts’ expectations of 27.00 billion yuan. However, the growth was slower than the 61% rise in the third quarter and the more than twofold increase a year earlier.

“Looking ahead, we will continue to prioritize investments in the platform ecosystem as the cornerstone of our long-term value creation strategy,” said Jun Liu, PDD’s vice president of finance.

Jefferies analysts in a note said PDD’s top-line miss was due to slower-than-expected revenue growth from transaction services, while revenue from online marketing services and others was in line with consensus.

The easing momentum contrasted sharply with the stunning growth rates the company delivered in past years. PDD last year repeatedly warned of a slowdown, pointing to intensifying competition and external challenges.

Pinduoduo, the company’s discount platform in China, has grown rapidly since it launched nearly a decade ago, taking market share from e-commerce stalwarts Alibaba and JD.com . Its sister platform Temu burst onto the international scene in 2022 and swiftly gained attention in the U.S., attracting customers with low prices.

However, Temu has also encountered regulatory scrutiny as it expands overseas. U.S. President Trump in February delayed his plan to end a provision for China imports that lets platforms avoid paying import duties and customs inspections on low-value packages, offering the likes of Temu a brief reprieve.

For the full year, PDD’s total revenue rose 59% to 393.84 billion yuan and net profit climbed 87% to 60.03 billion yuan.

Last month, rival Alibaba posted its fastest pace of revenue growth since late 2023, with revenue for the latest quarter rising 7.6% to 280 billion yuan. Online retailer JD.com earlier this month nearly tripled its quarterly net profit as revenue climbed 13% to 346.99 billion yuan.

U.S.-listed PDD was recently 6.5% lower in premarket trading after the results.

RBA Leaves Rates On Hold

The central bank remains focused on inflation.

Fourth-quarter revenue climbed 24% to 110.61 billion yuan, equivalent to $15.30 billion, but missed estimates.