Highlights:
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The Australian share market fell 1.9% in September, ending an impressive 11 month run of gains.
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Nonfarm payrolls rose 194,000 in September, the lowest so far this year, falling well short of expectations of a 500,000 increase.
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Eurozone economic sentiment rose to 117.8, supported by optimism from consumers and the construction sector.
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The RBA kept the cash rate on hold at 0.1% as expected; the Delta variant has interrupted the economic recovery more severely than expected, with GDP likely to decline materially in Q3.
Global economies
Global Covid-19 cases continue to rise with numbers surpassing 230 million cases and over 6 billion vaccine doses administered as at the end of September. Vaccine supply in Africa remains an issue with only 4.4% of the population being fully vaccinated contrasting with full vaccinations rates of 62% in Europe and 55% in the US. With lockdowns continuing across the globe, the pressure on supply chains was further exacerbated with energy crunches across Europe, the UK and China. Energy prices spiked across the globe due to supply issues and rising demand, with some energy suppliers going out of business and factories cutting production to reduce their energy costs.
US
The Federal Reserve left the target for its federal funds rate unchanged at 0.00-0.25% during its September meeting, as widely expected.
Europe
Eurozone economic sentiment rose 0.2 points to 117.8 in September, above market expectations of 116.9.
China
China’s inflation rate lifted 0.1% month-on-month in August, below of expectations of 0.5%.
Asia Region
The Bank of Japan left its key short-term interest rate unchanged at -0.1% and kept the target for the 10-year government bond yield at around 0.0% during its September meeting, as widely expected, amid continued weakness in employment and income due to the pandemic.
Australia
The RBA minutes for its September meeting revealed the bank still expects to keep rates at 0.1% until at least 2024 as it struggles to lift wage growth and inflation.
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The information in this Market Update is current as at 12/10/2021 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