Market Watch – A bumpier ride
– Trump’s trade tariffs with possible repercussions in the form of a trade war and a shake-up in technology stocks, led by Facebook on the back of its privacy violation, meant March was a bumpy ride for Wall Street. The U.S. stock market finished the first quarter of 2018 with losses for the first time in 10 quarters.
– The US Federal Reserve increased its benchmark interest rate by 0.25% but did not change its expectations of three hikes this year to four, as expected by a large portion of the market.
– US inflation came in as expected, further reducing the fears caused by a strong wage inflation number which sent jitters through the markets in February.
– Euro zone economic sentiment slipped in March, as business sentiment fell slightly but remains very high. The European economy is still healing and the ECB is no longer favouring an easing bias, although it is still a long way from tightening monetary policy.
– In Australia, economic growth for the final quarter of 2017 missed expectations at 0.4% which translated into 2.4% for the year. Growth is travelling at just short of trend.
– The RBA did not change rates at the March meeting for the 20th month in a row.
– The AUD fell further. The gap between the RBA’s cash rate and the US Fed Funds rate pushes further into negative territory.
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