It’s May, and many parts of the country will be grateful that cooler Autumn temperatures have finally arrived. On the national economic stage, the final touches are being made to this year’s Federal Budget which Treasurer Scott Morrison will hand down on the evening of Tuesday May 8.
April was a month of market volatility against a backdrop of ongoing global economic growth. In the US, 10-year bond yields broke through 3 per cent for the first time since late 2013. This, along with rising commodity prices, reignited inflationary fears and pushed the US dollar sharply higher. Oil prices (using the benchmark Brent Crude) rose more than 5 per cent in April, and 44 per cent for the year, to around US$74.5 a barrel. Spot iron ore prices rebounded 3 per cent in April to US$67.5 a tonne. The strong US dollar was behind the Aussie dollar’s sharp fall to around 75.5 US cents.
In contrast to the US, local inflation is stubbornly low. The March quarter consumer price index (CPI) lifted 0.5 per cent for an unchanged annual rate of 1.9 per cent. While secondary education, household power, pharmaceuticals and vegetables are rising faster than the headline rate, prices for women’s clothing, household appliances, audio and computer equipment are falling. National house prices recorded their smallest annual growth in over 5 years in March, with the CoreLogic Home Value Index up just 1.2 per cent. Consumer confidence improved over the month with the ANZ/Roy Morgan rating up 2.1 per cent to a 5-week high of 118.4 in the final week of April. The Reserve Bank’s cash rate remains steady at a record low 1.5 per cent where it is expected to stay for some time.
Read more from our May 2018 update here:
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