– Mixed results through March saw Australian and European markets generate strong returns, whilst the US was flat and Asian markets were down.
– In Australia, the RBA left interest rates unchanged based on low inflation, average business and consumer confidence and weak income growth. The recent strength of the Australian Dollar has caused some concern, however any reduction in the interest rate in order to counteract this is unlikely due to the current housing market conditions. In the share market, Australian shares moved higher (2.7%) over the month, with all sectors providing positive returns. Utilities, Healthcare, and Consumer Staples were the highest performers.
– In the US, the Federal Reserve officially raised cash rates by 0.25%, with the market anticipating up to three more rate hikes this year. Economic data from the US continued to show the economy strengthening, however US shares remained flat through March following the rate hike.
– In Europe, the Article 50 letter formally commencing Britain’s departure from the European Union (EU) was delivered with little to no impact on the UK’s share market. Economic data continues to improve in the EU, with increased speculation that the European Central Bank is on the verge of moving interest rates away from their extreme lows following no change to the official interest rates. In the European share markets, European shares surged through March, with the Italian Market rebounding up 8.4%, while French and German equities increased by 5.6% and 4.0% respectively.
– In the bond markets, US bonds fell 2.4% through March after the increase to rates, with Australian bonds following suit; falling lower through March. Australian Corporate Bonds continued to outperform its government counterpart, providing returns of 0.56% compared to 0.42% through March.
– The Australian dollar was volatile throughout March, fluctuating between $0.77 to $0.75 USD. However, it closed March with little change compared to the month before at $0.76.
– In the commodities market, iron ore reversed a lot of its strong gains made through February, moving back down to a more long-term sustainable level. Oil prices also fell sharply through March but rebounded late in the month to recover some of the losses.
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