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Market Highlights - A look back at March 2015


Australian EconomyGDP figures released early in the month showed that the economy continues to perform below trend at 2.5% year-on-year1. This was followed by somewhat healthier labour force figures of a drop in the unemployment rate to 6.3%1. A widening trade balance and drop in dwelling approvals further highlight the current lacklustre economic conditions.

Global Economy – As expected, the US has continued at its slow and steady pace, with GDP growth for the 2014 December quarter coming in at a modest 2.2% annualised and the workforce expanding by over 100,0002. Europe remains in sluggish growth, but a healthy manufacturing activity reading and rising economic sentiment show signs of life across the union. And signs of further stimulus out of China has allayed fears of any significant deterioration of Chinese economic growth.

Investment Markets – After a healthy jump in equity markets in February, most developed markets were flat or slightly positive in March. The major exception to this was Chinese shares, which rallied over 13%3 after Premier Li announced the regime's potential efforts to ensure GDP growth targets are met.

Outlook – Somewhat depressed figures out of the US may give Fed Chair Yellen the room to extend the ultra-low interest rate policy for longer than expected. This would generally be good news for markets, on top of further stimulus from Europe and China, but a growing number of unknowns are likely to keep volatility levels elevated.

S&P/ASX 200 – 12 months to 31 March 2015

Source: Core Equity Services

Footnotes: 1. Data from Australian Bureau of Statistics; 2. Dept of Labour, USA; 3. Bloomberg data.

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