Internet Banking

News

Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

Last week’s headlines were once again dominated by trade frictions between the US and China, while the US share markets continue to lead currency and interest rate markets at the moment. Consecutive gains in equities late last week on further reduced trade tensions and a recovery in the technology sector saw bond yields drift higher as risk-on trading re-emerged.

Locally, we had another RBA board meeting and we also received updates on retail sales; housing; and trade, all events/releases were “as expected” to slightly better than forecast.

The surprise perhaps last week was that the AUD is down despite the fact the Aussie has been the currency that has been among the worst affected by rising fears over the trade war and should have recovered last week as the trade war saga subsided. Also, commodity prices are slightly higher for the most part, typically AUD-supportive. This just proves that markets don’t always move as expected.          

Finally, just when investors thought stock markets across the globe had calmed before the weekend, Donald Trump urged his administration to impose tariffs on an additional $100 billion in Chinese imports. Despite a knee-jerk reaction in US equity futures on Friday, other global markets barely moved and we are finding that markets are becoming increasingly de-sensitised to such talks. Analysts are now viewing this type of commentary as typical Trump, bluffing with up front commentary statements so he has more bargaining power ahead of the negotiations this week.

View the full newsletter (PDF, 410KB)

Source: Rural Bank

 

Disclaimer: Whilst all care has been taken in compiling the information, the information should not be relied upon as substitute for professional advice where necessary. Rural Bank Limited accepts no responsibility for the accuracy, completeness or timeliness of the information and disclaims all liability in relation to any loss or damage suffered by the use of or reliance upon any information contained herein or in any attachment or annexure hereto by any person. Rural Bank Limited ABN 74 083 938 416 AFSL 238042.