FIG AVENUE INVESTMENTS

Australian economy

With the average mortgage rate in Australia moving above 6%, business and consumer confidence is starting to move heavily into negative territory. This is despite the fact that unemployment remains near all-time lows and the current account surplus in near all-time highs. Much of this is due to fast-running consumer prices, as well as the country's reliance upon the faltering construction sector¹. 

International economy

The moderating of oil prices from its recent highs in June has provided some breathing room for global prices and inflation. In the US, this has coincided with a bump in consumer confidence with employment levels relatively stable and the economy moving along well. Across the pond, a new PM in the UK is hoped to reverse concerns about the country's prospects¹. 

Investment Markets

Apart from Chinese equities, October was a kinder month for stock markets, with most rallying over 5%. The best performers in the developed market space were the mainland European bourses, which were up closer to 10%, while UK stocks performed below the average, largely owing to concerns over political stability².

Outlook

Even though OPEC+ has signalled a cut in production, oil prices are beginning to factor in the extent of a global slowdown in economic activity that looks inevitable consumer's purchasing power diminishes and interest rates look to stay 'elevated'. Despite suffering some embarrassing losses, it does not look likely that Russia will retreat back to pre-war borders anytime soon, meaning that European productive capability is likely to be stymied over the coming winter.

S&P/ASX200 - 12 months to 31 October 2022