FIG AVENUE INVESTMENTS

Australian economy

There are roughly 300,000 less people employed than at the start of the recent winter lockdowns in Melbourne and Sydney, whilst inflation remains relatively high. At the same time, Australia is still experiencing a near record trade surplus, primarily thanks to current high demand for natural gas and high commodity prices¹.   

International economy

The initial estimate for GDP growth in the US over the past few months has seen economic activity normalise back down. The US unemployment rate continues to fall, though the 'great resignation' might lead to a distorted market of high structural unemployment. This phenomenon does not seem to be spreading across the Atlantic, with aggregate unemployment levels in the EU sitting above 7%¹.

Investment Markets

The US and Europe both saw impressive gains for the month of October, bouncing back well from fears surrounding the debt bubble. The Australian market, however, was flat for the month, hindered somewhat by a strong bounce in the Aussie dollar and rising mid-term yields².

Outlook

Chances for rate hikes in the next 12 months from the world's leading central banks are increasingly likely given the strong bounce back in economic growth and relatively high inflation. Accordingly, central banks will have to rely on governments to continue to apply fiscal stimulus in order to push towards full employment.

S&P/ASX200 - 12 months to 31 October 2021