- The Australian share market finished the fiscal year with its best performance since inception, with the market gaining 23.9% over the past 12 months (on a capital return basis beating even the 23.7% seen in FY 2007).
- US employment surprised as non-farm payrolls came in well above expectations, despite a slight increase in the unemployment rate.
- Economic sentiment was upbeat in Europe supported by hopes of a strong recovery, and an accelerated Covid 19 vaccine roll out.
- The RBA kept the cash rate on hold at 0.1% as expected and the labour market continues to recover quicker than expected.
Global Covid-19 cases continue to rise with numbers just surpassing 183 million cases. This represents an increase of about 13 million in the month. Delivery of vaccines continues to rise and the UK reports over 84.9% of adults have received their first dose while 62.4% had received both. With a record number of cases recorded in Africa, the IMF has urged the G20 to do more to end the growing divergence of vaccine distribution. This comes on the back of the G7 agreeing to distribute 870m surplus vaccines this year. Key economic indicators continue to improve generally, with a number of leading economies beginning to report modest increases in inflation.
The United States continued to reopen, with 64.5% of the adult population fully vaccinated by the July 4th holiday, just shy of the 70% target President Biden set for the vaccination ‘month of action’.
Eurozone economic sentiment increased 3.4pts to 117.9 in June, beating expectations of 116.5, taking it just below the 21 year high of 118.20 in May 2000.
China’s inflation data disappointed in May, with month-on-month inflation contracting 0.2% (-0.1% expected), with the yearly inflation rate coming in at 1.3%, below expectations of 1.6%.
Concerns regarding a global re-opening have been renewed as restrictions on mobility have re-emerged.
The RBA left the cash rate unchanged at a record low of 0.1% during its July meeting, as widely expected. Policymakers reaffirmed their commitment to maintaining highly supportive monetary conditions until at least 2024 when actual inflation is expected to be within the 2-3% target.
The information in this Market Update is current as at 09/07/2021 and is prepared by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445 on behalf of National Australia Bank and its subsidiaries. Any advice in this Market Update has been prepared without taking account of your objectives, financial situation or needs. Before making any decisions based on the content of this document, the reader must consider whether it is personally appropriate in light of his or her financial circumstances or should seek independent financial advice on its appropriateness. Past performance is not a reliable indicator of future performance. Before acquiring a financial product, you should obtain and read the corresponding Product Disclosure Statement (PDS) and consider the contents of the PDS before making a decision about whether to acquire the product.