Australian Economy – Whilst the PM was abroad signing some free trade agreements with our Asian partners, there was more good news on the employment front at home in April, with the unemployment rate dropping back to 5.8%1. The RBA maintained their steady approach, keeping rates unchanged, which should be the policy for some time yet, especially with inflation figures coming in below 3% for the March quarter1.
Global Economy – Jobs data out of the US was again strong in April, with an increase in payrolls of 192,0002. Manufacturing also got a post-winter boost, though housing seems to be easing off from recent strong activity. Europe is also continuing its recovery, with industrial output now timidly into expansion and wage growth starting to pick-up. Concerns over China still hangs over the global recovery, with contracting manufacturing and slowing GDP growth continuing, whilst Japanese activity has taken a hit from Abe's increase to the sales tax.
Investment Markets – Developed markets gave investors a steady return in April with Australian, European and US markets up around 1-2%3. Chinese markets were somewhat flat, whilst Japanese equities continue to give back most of the gains made over the last 12-18 months (down another 3.5% in April and down about 12.5% since the start of the year).
Outlook – East-West relations have taken a big hit over the past few months, with Pro-Russian Ukrainians looking to escape the clasps of Europe in favour of mother Russia. Though there are plenty of "unknown unknowns" regarding consequences of further Ukrainian destabilisation, there will hopefully not be any major ramification for the global economy and her steady recovery.
S&P/ASX 200 – 12 months to 30 April 2014
Source: Core Equity Services