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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

It was another volatile week on global equity markets and while there was no new catalyst responsible for the volatility, investor sentiment remains fragile as a number of important issues remain uncertain. Equities were down again for the week and have now wiped out all the gains made so far this year.

Australian yields find themselves going into the final months of 2018 little changed on the year, but near the higher end of the recent ranges. The RBA may have recently upgraded its macroeconomic forecasts but any move in the official cash rate is still some way off. The domestic policy outlook continues to point to a rate hike as the next move for the RBA, but the timing and pace of moves is distant and slow.

The global environment continues to dominate our market at the moment with a number of risk events (US-China tension, Brexit, Italian budget) likely to take a toll. With the rates structure offshore heading higher and the RBA not likely to move any time soon, the US-Australian interest rate differential will continue to widen in the near term.

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Source: Rural Bank

 

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