The terrorist bombings in Brussels were the main focus for markets last week igniting some modest safe haven flows. According to reports, the tragic Brussels bombings have left 34 dead and hundreds wounded with suggestions that at least some of the alleged attackers are still on the loose.
There was an initial sell-off in most currencies against a stronger US dollar, lower European equities and a corresponding rally in government bonds and the price of gold. However, 24 hours later, markets had rebounded as a raft of data supported the view that global economic activity and sentiment had stabilised.
One big move over the last week was ANZ’s change in their view on monetary policy. They are now predicting no further rate cuts from the RBA when previously they had pencilled in two cuts over 2016. I’m still with the current market view, with one more cut, around September, and then a flat cash rate of 1.75% for 12 months.