The Pulse
- Markets extended gains for the month as accommodative monetary and fiscal policies continued to support markets.
- US employment disappointed as non-farm payrolls came in below expectations despite a fall in the unemployment rate.
- Economic data continues to surprise to the upside in Europe as progress is made on the Covid-19 vaccine rollout across the Eurozone.
- The RBA kept the cash rate on hold at 0.1% as expected. First quarter GDP came in at 1.8% quarter on quarter.
Global economies
Global Covid-19 cases continue to rise with numbers just surpassing 170 million cases. This represents an increase of about 20 million in the month. Delivery of vaccines continues to rise and Germany now reports over 40% of the population having received at least one dose. The EU has also recommended the relaxation of travel restrictions to those fully vaccinated with an EU approved vaccine. Key economic indicators continue to improve generally, with a number of leading economies beginning to report modest increases in inflation.
US
The United States re-opening continued in May, ending the month with 40% fully vaccinated and with 50% having received at least one dose.
Europe
Eurozone economic sentiment increased 4.0pts to 114.5 in May, beating expectations of 112.1 and marking its highest reading since January of 2018, remaining considerably above its long-term average of 100.0 and pre-pandemic levels.
China
China’s CPI fell 0.3% in April, below expectations of a 0.2% decline, while the yearly rate lifted 0.5% to 0.9% (1.0% expected).
Asia Region
Despite progress in the vaccine rollout and declining Covid-19 case numbers across much of the developed world, case numbers are spiking in Asia where vaccines have been slower to roll out.
Australia
The RBA left the cash rate unchanged at a record low of 0.1% during its June 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.
DISCLAIMER
The information in this Market Update is current as at 9/06/2021 and is prepared by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445 on behalf of IOOF Holdings Ltd 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.