September Market Update 2021

The Pulse

  • The Australian share market reached an all-time high in August, with the S&P/ASX 200 gaining 2.5% for the month. 
  • Non-farm payrolls added 235,000 jobs, the lowest in seven months and well below forecasts of 740,000 as a surge in COVID-19 infections may have discouraged companies from hiring and potentially discouraged workers from actively looking for a job.
  • Eurozone economic sentiment dropped to 117.5 falling for the first time since January’s slight decline, amid concerns over the Delta coronavirus variant.
  • The RBA kept the cash rate on hold at 0.1% as expected; Australian GDP increased 0.7% in the second quarter, ahead of expectations.

Global economies
Global Covid-19 cases continue to rise with numbers surpassing 217 million cases August and over 5 billion vaccine doses administered as at the end of August. As lockdowns continue across the globe, the pressure on supply chains is being felt. Container prices have risen four-fold in the last 18 months with some retailers warning of shortages in the lead up to Christmas and concerns are growing over global coffee supplies amid tough travel restrictions imposed in Vietnam, the world’s second largest coffee exporter.

At the recent Jackson Hole Symposium, Federal Reserve Chair Jerome Powell signalled the central bank will likely being tapering before the end of the year, but will may not translate to a direct increase in the Federal Funds rate.

Eurozone economic sentiment dropped to 117.5 in August, from an all-time high of 119.0 in the previous month and below market expectations of 117.9.

China’s inflation rate lifted 0.3% month-on-month in July, ahead of expectations of 0.2%.

Asia Region
From a sporting perspective, the Tokyo Olympics and Paralympics were a massive success for Japan but losses from spectator free games will total 2.4tn Yen and the surge of COVID cases in Tokyo has continued.

RBA left the cash rate unchanged at 0.1% during its September meeting, as widely expected and reconfirmed the gradual reduction of its quantitative easing program.

The information in this Market Update is current as at 15/09/2021 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.

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