Australian Economy – The second drop in interest rates in less than 6 months came as little surprise to most. With unemployment remaining high and inflation subdued, the RBA decided to ignore the heated property markets in favour of further stimulus for business.
Global Economy – Jobs growth is continuing in the US, despite concern over some areas of the economy. Data showing another 200,000+ jobs added and the employment rate steady at 5.4%, was contrasted against the revised decline in real GDP for the March quarter2. Europe still seems to be moving in the right direction with March quarter GDP growth at 0.4% and manufacturing slowly expanding.
Investment Markets – A flat month for many of the world's global equity markets. Japan was among the better performers with the Nikkei up over 5%3.
Outlook – With the Queen announcing a referendum to take place sometime in the next two years on whether the UK should remain in the EU, markets have been handed another piece of noise on which to drain focus. This hasn't taken away too much from the speculation surrounding the next move from the Fed, with markets eagerly awaiting further guidance from Yellen and co.
S&P/ASX 200 – 12 months to 31 May 2015
Source: Core Equity Services
Footnotes: 1. Data from Australian Bureau of Statistics; 2. Dept of Labour, USA; 3. Bloomberg data.