Australian Economy – Australian economic indicators continue to improve, with unemployment slowly dropping and trade picking up. This is against the backdrop of virtual elimination of Covid across the country, along with the start of the vaccine roll-out. The RBA remains cautious, sitting at ultra-low rates and continuing its bond buying program.
Global Economy – The US economy has continued its post-Covid rebound with GDP growth above trend and unemployment moderating downwards. And even though the next round of stimulus has been ratified by the majority party, persistently high jobless claims is a worry. The picture is not as rosy in Europe, with unemployment remaining high and business confidence still in negative territory1.
Investment Markets – Equity markets enjoyed another good month with most finishing up over 1%. European and Japanese stocks outperformed with both increasing by over 4% in February. Other Asian stock markets, which have been the best performing markets over the past year, were mostly flat2.
Outlook – The rollout of vaccines will likely see countries start to open up more and more over the next 6 months. Industries that have been hit the hardest, such as tourism and hospitality, should ramp up well, adding to the overall recovery story. Premature removal of stimulus, however, along with major economic events such as Brexit and trade wars, could lead to a bumpy ride through 2021.
S&P/ASX 200 – 12 months to 28 February 2021
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .