Australian Economy – A big drop in the unemployment rate was a good sign for the Australian economy as it continues to push through its Covid-19 recovery1. The growing budget deficit and economic growth is not coming at the expense of prices, with inflation remaining below the 2-3% target rate monitored by the RBA.
Global Economy – Growth in the world's largest economies, the US and China, are helping the global economy to build momentum, despite the sluggish pandemic recovery occurring in Europe. This 2-speed global growth is driven partly by the greater aversion to debt of Northern Europe, as well as the ongoing ramifications flowing from the UK's exit from the single market.
Investment Markets – Stock markets had a little more gas in the tank in April, with most developed markets up over 1% for the month. Japanese equities were the only major stock bourse down for the month, but that comes after a 12-month rally well ahead of most others2.
Outlook – With light beginning to flood through the long Covid tunnel, most market participants are expecting business activity to continue its strong growth over the short-to-medium term. The only real concern at the moment is perhaps a need to keep the printing presses running in order to avoid a precipitous fall in business and consumer confidence.
S&P/ASX 200 – 12 months to 30 April 2021
Source: Yahoo! Finance
Footnotes: 1. TradingEconomics; 2. Bloomberg data .