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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

It was an unpleasant week for global equity markets with falls of over 5% seen last week – moves similar to those experienced last February (share market was down 9% back then). The sell-off was mainly attributed to renewed US-Chinese trade concerns although exactly why those concerns escalated last week hasn’t been explained as well as concerns around the impact of higher US interest rates (and the potential impact on company earnings going forward) – but markets have known this for some time. The market was apparently reacting to US President Trump’s comments that he thinks the US Federal Reserve has “gone crazy” tightened too much and too quickly which he says may kill the recovery in the US.

Locally, we were also affected by the offshore moves and Australian markets closed lower last week even though unlike the US Federal Reserve, the RBA is unlikely to raise our official cash rate any time soon. However, markets have a saying, “if the US sneezes, the rest of the world catches a cold” so expect some volatile times ahead.

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Source: Rural Bank

 

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