Highlights:
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The Australian share market reached all-time highs in July, with the S&P/ASX 200 gaining 1.1% for the month.
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US employment surprised again as non-farm payrolls came in well above expectations, coupled with a falling unemployment rate, reinforces the strength of the economy.
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Economic sentiment in Europe rose for the sixth month in a row supported by hopes of a strong economic recovery due to the reopening of economic activities.
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The RBA kept the cash rate on hold at 0.1% as expected and upgraded the outlook for 2022 with economic growth expected to be 4.0%.
Global economies
Global Covid-19 cases continue to rise with numbers surpassing 197 million cases at the end of July, an increase of 14 million in the month. Delivery of vaccines continues to rise with 3.8 billion doses delivered globally as at the end of July, with the European Union saying that 200 million Europeans have been fully vaccinated. Vaccination remains key as countries with high vaccination rates are showing lower hospitalisation and death rates even with increased infection rates. Key economic indicators continue to improve generally, with several leading economies reporting above expected increases in inflation.
US
The FOMC kept interest rates on hold at 0.25% as widely expected, indicating that it is moving closer towards tapering bond purchases.
Europe
Eurozone economic sentiment rose in July for a sixth month in a row to an all-time high of 119.0, ahead of the expected 118.7.
China
China’s inflation rate for June unexpectedly fell 0.4%, compared with forecasts of a flat reading, while the annual rate of inflation also fell to 1.1% from May’s eight-month high and market expectations of 1.3%.
Asia Region
Tokyo hit a new daily record of 3,177 new COVID-19 cases at the end of July, as pressure mounted on the hospital system.
Australia
RBA left the cash rate unchanged at 0.1% during its August meeting, as widely expected, while maintaining the target of 0.1% for the April 2024 Australian Government bond. Additionally, it upgraded the outlook for 2022 with economic growth expected to be 4.0% and the unemployment rate to be 4.25%.
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The information in this Market Update is current as at 10/08/2021 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.