The Pulse
- Australia’s S&P/ASX 200 Index had a strong month returning 6.9% led by Information Technology (+13.2%), Energy (+9.8%), and Materials (+8.9%). All sectors finished up during the month.
- The Federal Reserve raised interest rates to 0.50% as they look to tackle the highest level of inflation in 40 years.
- The war in Ukraine continued to aggravate stock market volatility and put pressure on energy supply and prices.
- The RBA kept the cash rate on hold at 0.1% and reiterated unpredictability over the pick-up in Australia’s inflation on the back of recent developments in global energy markets and ongoing supply-side problems.
Global economies
Global Covid-19 cases continue to rise with numbers surpassing 485 million cases and 11 billion vaccine doses administered as at the end of March. A new Omicron sub variant emerged, causing a spike in infections across Europe and China.
US
The Federal Reserve lifted interest rates from 0.25% to 0.50% in March -the first rise in three years – as they look to tackle the highest level of inflation in years and leveraging off a strong US economy.
Europe
As widely expected, the European Central Bank kept interest rates at 0%, however it surprisingly sped up its asset purchase schedule for the upcoming months.
China
China’s CPI grew by 0.6% over February, 30bps higher than expectations whilst the annual rate was flat at 0.9%, as anticipated.
Asia Region
The Bank of Japan left its key short-term interest rate unchanged at -0.1% and the 10-year bond yields around 0% during its March meeting.
Australia
Measures aimed at reducing strain on household budgets were announced in the Federal Budget, including a temporary cut in fuel excise and targeted rebates.