Australian Economy – Data for the month continues to highlight a sluggish local economy. Unemployment remains somewhat high and business confidence is well below the long-term average1. A reliance on construction and new dwellings seems to be the main factor keeping the economy floating along.
Global Economy – On the employment front in the US, conditions continue to improve as broader measures of unemployment falling and wages improving slowly. There has been a marked slowing of US GDP growth, with a widening trade deficit a primary detractor2. The unemployment rate in Europe remains high, though has seen improvements over the past year, falling back below 10%.
Investment Markets – The main focus for markets around the world in April were on Greek debt negotiations and the UK elections. Markets were relatively subdued during the month, with most finishing somewhat flat. Chinese equities, however, continued their march, with shares in Hong Kong and Shanghai both up over 10%3.
Outlook – With a resolution in Greece and the UK, the market is likely to return focus to the US and the Fed. Lower growth estimates for the March quarter may delay any rate hikes in the US, but creeping wages will be a concern. This is likely lead to greater risks of heightened volatility.
S&P/ASX 200 – 12 months to 30 April 2015
Source: Core Equity Services
Footnotes: 1. Data from Australian Bureau of Statistics; 2. Dept of Labour, USA; 3. Bloomberg data.