Australian Economy – Despite a slight increase in the unemployment rate, the Australian jobs landscape continues to look positive. This was again evident in the June numbers, with seasonally adjusted, full-time jobs numbers growing by almost 40,000 and the participation rate ticking up a little higher1.
Global Economy – A similar story in the U.S. with jobs growth coming in at a large 287,000 despite the unemployment rate ticking up 0.2% to 4.9%3. There are concerns though whether the large increase in non-farm payrolls will be sustained, with factory activity decelerating somewhat during the past month. In other major economies, the manufacturing picture was also looking a little shaky, with the UK, China and France all showing shrinking activity.
Investment Markets – The post-Brexit vote bounce continued throughout the month of July with all major equity markets posting solid returns. Japan, up 6.4%, and Australia, up 6.3%, led the way while Europe clawed back about half of what it had last in June4.
Outlook – Now that the U.S. Presidential nominees have been officially confirmed, most of the world's attention will be focused towards the 8th of November. On the domestic front, a stronger $A (up 5% since the start of the year)is likely to give some concern to the RBA, and the post-election rhetoric will likely be centred on whether or not the Turnbull Government can establish a clear policy framework for the next few years.
S&P/ASX 200 – 12 months to 31 July 2016
Source: Core Equity Services
Footnotes: 1. Australian Bureau of Statistics; 2. Westpac-Melbourne Institute; 3. Dept of Labour, USA; 4. Bloomberg data.