Finance, in brief

Australia's central bank raised its main interest rate to 4.85% on Tuesday, up from 4.6%. [1] It is the highest rate since 2008. [1]

It was the bank's 5th rise this year. [2]

The rise lands on more than 3.3 million Australian households with home loans. [1]

The Reserve Bank of Australia is the country's central bank, which sets its main interest rate. [2]

Bullock said high prices hurt most 'Australians on lower incomes, including people who rent'. [3]

Mortgage holders pay more each month. [1] Savers at banks such as Macquarie earn more on their deposits. [3]

Economists call this monetary policy: a central bank makes borrowing dearer to bring price rises back to its target. [4]

Macquarie passes the rise on to its home loans. [3] Borrowers then have less money left each month to spend. [1]

Bullock warned that when people expect higher prices, firms raise theirs early, and the rise feeds itself. [3]

When a family's rent goes up, it eats out less, and the cafe down the road sells fewer meals.

Asked if rates would be this high without the war, Bullock said: 'I don't know the answer to that.' [3]

Their variable savings accounts pay 0.25 points more from 19 November. [3]

Banks pass the rise on, and Macquarie's higher loan rates start on 19 November. [3]

Bullock said high prices hurt them most, as many have little or no savings to fall back on. [3]

Whether Australia's 5th rise this year is its last.

Capital Economics says the next move will be a cut. [4] Bullock says the 3 votes to wait are no sign that rises are over. [3]

Brent, the world's main oil price, fell 7.63% to $104.77 a barrel on Monday. [5]

It was the sharpest one-day drop in months. [11] US oil fell 7.4% to $96.46 a barrel in New York. [15]

Iran held a 3rd day of talks in Qatar about ending the war and reopening the Strait of Hormuz. [16]

Iran offered to reopen it within 2 days, on terms including the US lifting its blockade of Iran's ports. [16]

Oil rose 0.5% early on Tuesday after reports that the US struck Iran's Qeshm Island. [5]

Falling oil eased fears of rising prices and pulled down long-term US borrowing costs. [11]

Commodity traders call the extra paid for the chance of a shortage a risk premium. [5]

Talks made a blocked strait look less likely, so the premium shrank on Monday. [16] The strike report added some back on Tuesday. [5]

Match tickets cost more while fans fear a sell-out, and less once plenty of seats are left.

No extra oil reached the market on Monday, an Investing.com analysis noted. [16]

Whether Iran and the US agree a deal that reopens the Strait of Hormuz.

The talks in Qatar ended with changed proposals but no breakthrough. [6] The US struck Qeshm Island the same day. [5]

Brent oil fell 7.63% to $104.77 a barrel on Monday, its sharpest one-day drop in months, as Iran held a third day of talks in Qatar on ending the war.

Marvell, a US chip maker, agreed on Monday to buy Lumentum, which makes optical parts for data centres. [17]

The deal values Lumentum at $115 billion, counting its debt, and is paid entirely in Marvell shares. [17]

Lumentum's owners get 4.5 Marvell shares for 1 Lumentum share. [18] That was worth about $1,132 a share, 23.9% above the price before talk of a deal. [18]

Afterwards Marvell's owners will hold about 67% of the joined company, and Lumentum's about 33%. [18]

Optical parts carry data between AI chips with light, faster than copper wires can. [17]

Marvell's shares fell more than 10% on Monday, and Lumentum's more than 15%. [17]

Some analysts doubt Marvell should take on a deal worth more than half its own market value. [17]

In corporate finance, a set swap like 4.5 shares is called a fixed exchange ratio. [18]

Lumentum's owners are paid in Marvell shares. [17] So when Marvell's price fell, their payment was worth less too. [17]

Swap your bike for a friend's game cards, and your bike is now worth whatever those cards sell for.

Reuters worked out that the deal values Lumentum at 33 times its expected yearly core profit. [17] Similar firms sell for about 16 times. [17]

The deal needs owners' and regulators' approval and is due to close in the first half of 2028. [18]

They will own part of a bigger company, though their payment now rises and falls with Marvell's shares. [17]

How far Marvell's and Lumentum's shares really fell on Monday.

Reuters reported falls of more than 10% and 15%. [17] CNBC said about 12% and 18%. [9] Dow Jones said both lost more than 15%. [58]

Oracle, a US software and cloud firm, sold $10 billion of new shares and $10 billion of bonds on Monday. [19]

It sold 86,206,897 new shares at $116 each. [12]

Its bonds pay 7% a year on loans due in 2029, up to 8.65% on loans due in 2046. [12]

In between, it pays 7.45% to 2031, 7.85% to 2033 and 8% to 2037. [12]

Last week Oracle pledged to raise no more than $20 billion of new money for AI through 2030. [20]

Its shares still fell 8.8% on Monday, and are down 33% this year. [19]

Oracle owed $125.34 billion at the end of August. [20]

Oracle is building data centres for AI and is heavily exposed to OpenAI, the loss-making maker of ChatGPT. [20]

In credit analysis, a lender charges more interest the more it fears not being repaid. [21]

Analysts at CreditSights say Oracle's bonds trade like 'junk', the riskier grade of debt. [21] So it pays high interest to borrow. [21]

A friend who has been slow to pay back before must promise more to borrow again.

'This seems to be exactly what they previewed,' said Baird analyst Rob Oliver of Monday's fall. [19]

Investors are making AI builders pay more for money: Oracle's new bonds due in 2046 pay 8.65% a year, and lenders want more from QTS than 6 months ago. [12][10]

They are paid a fixed yearly interest until as late as 2046. [12]

Each owner's slice of Oracle gets smaller as the new shares are added. [12]

The Nasdaq 100, an index of big US tech shares, fell 1.4% to 27,989.82 on Monday. [8]

That left it more than 10% below its 6 October peak. [8] Traders call a fall that size a correction. [8]

It is the index's 3rd correction this year, though it is still up 11% for 2026. [8]

The wider S&P 500 fell 0.51%. [15] The Dow, an index of 30 big US firms, rose 0.41%. [15]

Intel, the US chip maker, fell another 8% on Monday. [22] It dropped 45% in October, its worst month on record. [22]

Investors fear big tech firms are spending more on AI than it will pay back. [8]

'I don't think the AI trade is dead, but it did get ahead of itself,' said fund manager Brian Culpepper. [8]

Apple's sales rose 12% to $114.5 billion in the 3 months to late September. [23]

Its profit was $30.7 billion, and both beat analysts' forecasts. [23]

They were the first results under John Ternus, who took over from Tim Cook as boss on 1 September. [24]

Apple expects its profit margin to fall to 45% to 46% this quarter, from 47.9%. [23]

Before the results, options traders priced a move of just under 4%, against 2.5% on average after past results. [25]

Its shares fell as much as 4% after hours, then traded 2.7% down. [23]

Apple raised prices across its range in June, including $100 more for iPhones. [24]

'What we're seeing with memory pricing right now is unprecedented,' Ternus said. [26]

AI data centres buy the same memory chips, so phone and laptop makers pay more. [27]

Accountants call the share of each sale left after making the product the gross margin. [23]

Price rises covered only part of dearer memory: without tariff refunds, margins fell about 1 point. [27] And memory costs keep rising this quarter. [23]

A lemonade stand that pays more for lemons keeps less from each cup, unless it charges more.

Apple's sales in Greater China, $17.54 billion, missed analysts' $18.75 billion forecast. [28]

Why options cost more just before a company's results

An option is a paid right to buy or sell a share at a set price later

Its price rises with how far the share might swing before then

Before results, a big swing is more likely, so options cost more

From that price, traders work out the move the market expects

Once the news is out, options get cheaper again

The price of an option tells you how big a move traders fear. It says nothing about which way the share will go.

Palantir's shares: the move options were priced for, against what happened.

Options were priced for an 11.5% move before the results. The shares then dipped about 3%, far less than the move buyers had paid for.

Options were priced for a move of just under 4%, against 2.5% on average after past results. The shares fell 2.7% after hours.

The option price shows only how big a move traders fear. The real move can be much bigger or much smaller, as Palantir's was.

The traders buying protection, the traders selling it and the company reading out its results all wait on the same evening, and none of them knows the number first.

Palantir, a US maker of data and AI software, said its sales rose 96% from a year before. [29]

Sales reached $2.31 billion, its first quarter above $2 billion. [30]

Sales to US businesses rose 148% to $984 million. [30] For the first time, that beat sales to the US government, of $953 million. [30]

Its profit more than doubled to $1.13 billion. [30]

Before the results, options traders priced an 11.5% move in its shares, against a 10% average after past results. [25]

Its shares dipped about 3% in late trading. [30]

Investors watch Palantir as a test of whether companies will pay for AI software. [29]

Chief executive Alex Karp called the quarter 'extraordinary', yet the shares fell 3.6% after first rising. [29]

Options were priced for an 11.5% move before the results. The shares then dipped about 3%, far less than the move buyers had paid for.

Strong sales at Apple and Palantir did not lift their shares, which fell after the results. [23][30]

Anthropic, the AI company that makes Claude, updated its share-sale papers on Monday. [31]

Its sales were about $17 billion in July to September, 47% more than in the 3 months before. [32]

It lost $23.29 billion in the quarter. [31] Over 9 months, most of its loss came from revaluing loans that can turn into shares. [31]

It has signed deals to spend about $895.4 billion, almost all on computing power and buildings. [31]

About $447.5 billion of it falls due by the end of 2030, and $447.9 billion from 2031 to 2045. [32]

It held $131.8 billion in cash and short-term investments in September. [32] Nearly $70 billion of its signed spending is due within a year. [32]

Anthropic plans to list its shares in New York later this month. [33]

The figures arrive as investors grow wary of how much AI firms spend. [31]

Growth is slowing from quarter to quarter: 47% now, against 144% in the quarter before. [31]

A huge sales figure draws the eye away from the bills behind it: Anthropic's $17 billion quarter sits beside $895.4 billion of signed spending. [32][31]

How Anthropic pays for its signed spending in the years after 2030.

About half of the $895.4 billion falls due between 2031 and 2045, and it depends on sales that have not happened yet. [32]

China's central bank will make banks keep 6% of their foreign-currency deposits with it, up from 4%. [34]

The change starts on 15 November. [34]

The yuan fell on Tuesday, heading for its biggest one-day drop in 6 months. [35] One dollar bought 0.3% more yuan, at 6.6705. [36]

The yuan has risen more than 5% against the dollar this year. [37] In October it reached its strongest in more than 4 years. [34]

A stronger yuan makes Chinese goods dearer abroad, and exports drive China's economy. [34]

Central bankers call this a reserve requirement: a share of deposits banks must park with the central bank. [34]

Parked dollars cannot be swapped for yuan. [36] So demand for yuan falls, and its rise slows. [36]

If a school holds back some of every pupil's pocket money, the tuck shop sells fewer sweets.

Reuters estimates the rule takes about $24 billion out of China's banking system. [37]

The bank cut this same ratio in September 2023, when it wanted to stop the yuan falling. [37]

China's central bank cut the rate on a cheap-loan scheme for share buybacks to 1%, from 1.25%. [38]

It also made the scheme permanent, after Monday's meeting with regulators, banks and fund firms. [38]

The scheme lends cheap money to banks. [38] They lend it on to firms and big owners buying shares. [38]

China's stock regulator approved 31 broker and fund firms for a 3rd round of a swap tool funding share buying. [38]

Both tools began in October 2024 to steady China's share market. [38]

The CSI 300, China's main share index, fell 8.5% in October, its worst month in more than a decade. [38]

China's government wants a 'slow bull' market that draws household savings into shares. [38]

'The government wants to be seen as supportive, or investor confidence could decline even further,' Gavekal analysts wrote. [38]

South Korea's Kospi index fell 3.57% on Tuesday, after tech losses in New York. [9]

Samsung Electronics, the heaviest share in the index, fell 4.04%. [9] SK Hynix, another memory-chip maker, was down 3.8% earlier. [39]

Taiwan's Taiex fell 1.0%, and Japan's markets were shut for a holiday. [39]

Hong Kong's Hang Seng rose 0.52%, and Australia's ASX 200 was up 0.39%. [9]

Investors doubt record spending on AI, and chip shares were the biggest losers. [39]

'The market hasn't lost faith in AI, but it's losing patience,' said Chris Weston of Pepperstone, a broker. [39]

The yield on 10-year US government bonds fell to 4.893% on Monday. [15]

Yields and bond prices move in opposite directions, CNBC notes. [40]

During the day it touched under 4.87%, its lowest since 10 September. [41]

The 30-year yield fell to 5.268%. [15]

US government bonds just had their biggest monthly rise in price in more than 2 years. [41]

The dollar index, which measures the dollar against the euro, the yen and others, hit a 1-month low on Monday. [11]

Cheaper oil eased fears that the US central bank will keep raising rates. [41]

Bond traders watch the inflation outlook, meaning how fast prices are expected to rise. [41]

Slower expected price rises mean fewer rate rises, so lenders accept less interest on long loans. [41]

Traders still expect at least 2 more quarter-point US rate rises by the end of next year. [41]

Gold rose more than 2% on Monday to $3,954.41 an ounce. [6]

It had fallen to its lowest in a year on Friday. [6]

It slipped 0.5% to $3,926.52 early on Tuesday as traders waited for the US vote. [6]

Silver futures on India's MCX exchange fell 20% in October, their steepest monthly drop. [42]

Traders see a 74% chance that the US central bank raises rates in December, CME's FedWatch tool shows. [6]

Cheaper oil eased fears of rising prices, and of higher US rates. [6]

Investors call the interest you give up by holding something the opportunity cost. [6]

Gold pays no interest. [6] So when higher rates look less likely, holding it costs less, and buyers return. [6]

Keeping cash in a drawer costs nothing, until a bank offers a good rate on savings.

Gold 'continues to be sold' to cover losses elsewhere, not bought as a safe place, said KCM Trade's Tim Waterer. [6]

Whether the US central bank raises rates in December.

Traders put the chance at 74%, but cheaper oil has cut the rises they expect. [6][41]

London's FTSE 250, an index of mid-sized British firms, rose 1.4% on Monday. [33]