BT Investment Solutions’ (BTIS) monthly market commentary provides timely updates on market movements, addressing key economic events and their impact on portfolios.
Once again, the month of April saw inflation continue to dominate the headlines. Central Banks commenced transitioning to their next phase of monetary policy settings. Key economic indicators remain mixed, with supply chains issues remaining a concern, consumer & business confidence fell - leading to most risk markets ending the month in the red.
March was a month full of central bank decisions with two of the key developed market economies choosing to raise official interest rates. As the world continues to deal with the fall out of the war in Ukraine, downstream impacts to asset prices and supply chains, most risk markets ended the month in the green.
February saw continued equity market volatility due to concerns surrounding inflation, supply chain constraints, monetary policy and rising bond yields. February also saw an escalation in geopolitical tensions with Russia invading Ukraine adding further uncertainty to markets. Only time will tell what this will mean for central bank policy, economic growth and financial markets in general.
While only a month into 2022, the year has well and truly started with a bang. From increasing omicron concerns, equity market volatility, record levels of inflation, hawkish central bank rhetoric and rising bond yields – January was not a month for the faint hearted.
Monthly commentary - December 2021
2021 was a whirlwind of central bank policy, inflation, supply chain disruption, geopolitical tension and climate change activity. December was no exception to this with a raft of positive economic data showing the progress of our path to recovery. We now look to 2022 and the next phase of the pandemic.
Monthly commentary - November 2021
Fears over the emergence of the Omicron variant dominated the global economy this month as a fourth wave of COVID-19 rushes through Europe. Inflationary concerns continued throughout the world as most central banks reaffirmed that interest rates will not increase before 2023 despite market expectations for 2022.
Monthly commentary – October 2021
Climate change concerns and energy woes dominated the global economy this month as nations prepared for the UN’s Climate Change Conference (COP26) and continued to respond to a tightening energy market.
Focus on China continues as investors keep their eyes on the property sector, looking for any further indications of instability after September’s Evergrande “almost-crisis”. Whilst global financial markets were spurred on by strong September quarter earnings, sparking the bulls across Australia, the US and Europe.
Markets this month were hit by a mixed bag full of events, from energy pricing pressures, nuclear diplomacy, name calling in the US senate and the ’wait and see‘ credit crisis of China’s property giant, Evergrande.
We also witnessed the AUKUS alliance which was formed between Australia, the UK and the US which included the building of nuclear submarines for Australia, while France was left out in the cold.
Countries and markets around the world continued to react to the resurgence of COVID-19’s Delta variant. At home, Australia finished the month with 60% of its population under stay-at-home orders reporting record numbers of daily COVID cases.
The Delta strain continues to run rampant across Sydney, with case numbers continuing to soar and some form of restrictions expected to last for months. Throughout the rest of the world however, a dire situation is unfolding as Delta’s unprecedented virulence is forcing countries to reimplement restrictions and reassess their reopening strategies.
FY 2020/21 began as COVID-19 continued to rapidly spread throughout the world, severely impacting global economies. This unpredictable pandemic resulted in declining consumer spending and sentiment, culminating in the contraction of many major economies. However, by the end of the calendar year, there were signs of economic recovery following the successful development and distribution of COVID-19 vaccines.
With the continuing outbreak of COVID-19 in Melbourne and by the end of the month, Sydney was feeling the full force of the Delta variant. The resulting three-week lockdown has seen considerable pressure being placed on the domestic economy.
Over the course of May markets saw global inflation fears catalyse volatility. While the high vaccination rates across Europe and the US led to increased consumer sentiment, a rapidly deteriorating outbreak of COVID-19 throughout India sent shockwaves around the world.
April saw life in Europe, the UK and the United States slowly return back to what could be described as the new Covid-19 normal.
As the first quarter of the year ended, the impact of the COVID-19 pandemic on risk markets almost seemed non-existent. Over March we saw US markets return to all-time highs, further upgrades to the global economic outlook, additional US stimulus packages and central banks reaffirming monetary policy and inflation expectations.
BT Investment Solutions (BTIS)
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This document has been created by Westpac Financial Services Limited (ABN 20 000 241 127, AFSL 233716). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Projections given above are predicative in character. Whilst every effort has been taken to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The results ultimately achieved may differ materially from these projections. This document may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, Westpac Financial Services Limited does not accept any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, Westpac Financial Services Limited intends by this notice to exclude liability for this material.
Information current as at 15 June 2020. © Westpac Financial Services Limited 2020.