Australian Economy – It was a month of mixed data with signs of continued growth in resources and exports offset by sluggish inflation and employment numbers. Both personal and commercial borrowing seems to be falling while construction, services and manufacturing have all seen recent industrial production expansion1.
Global Economy – America survived the first 100 days of Trump, with a heightening of tensions on the Korean Peninsula along with a 59 missile attack on a Syrian airbase. However, on the domestic front, there was little by way of policy implementation, with a series of key policies failing in other branches of Government. The US economy though seems to be enjoying the current administration with unemployment falling to a decade low rate of 4.5%2.
Investment Markets – April was a relatively steady month for global equities, despite the risk of a major geopolitical event increasing dramatically. Most markets were up between 1-2%, apart from Chinese equities, which fell by about 0.5%3.
Outlook – With another European election avoiding the right, the nationalistic trend seems to be abating. However, the risk of war still remains dangerously high and a wrong move by any number of unstable leaders could tip the scales towards aggressive military action. On the Australian front, property construction in Melbourne and Brisbane looks to be running out of steam. Add this to the looming auto-manufacturing closures in Victoria and the employment picture in Australia could turn south in a hurry.
S&P/ASX 200 – 12 months to 30 April 2017
Source: Core Equity Services
Footnotes: 1. Australian Bureau of Statistics; 2. US Dept of Labor; 3. Bloomberg data.