Highlights:
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Australia’s S&P/ASX 200 Index finished the month of May -2.6%, with all sectors of the market lower except Materials.
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The US Federal Reserve has raised rates by 0.5%, the most aggressive interest rate increase in over 20 years, in response to the high inflation rate.
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Annual inflation rose to 8.1% in the Euro zone, largely driven by energy prices.
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The RBA raised the cash rate to 0.35% in May, the first increase in 10 years, amid rising inflation.
Global economies
Continuing lockdowns in China, notably in Shanghai, have had an ongoing impact on global supply chains, especially in the electronics sector. The war in Ukraine continues to put pressure on global food supplies.
US
The US Federal Reserve has raised rates by 0.5%, also flagging that more 50 bps increases are likely to be implemented in the coming months.
Europe
In the UK, GDP decreased by 0.1% in March, with the last 3 months coming in at +0.8%..
China
CPI came in at 0.4% in April, with the annual rate increasing to 2.1%, above the expected 1.9% increase.
Asia Region
The Bank of Japan said the country’s economy is projected to grow more slowly, amid headwinds from a resurgence in COVID-19 cases and a rise in commodity prices due to the situation in Ukraine.
Australia
GDP grew by 0.8% in 1Q22, above the 0.7% expected, with year over year GDP falling from 4.2% to 3.3%.
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The information in this Market Update is current as at 9/6/2022 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.