• Along with high rates of infection in the US and elsewhere, the surge in infections had economists scrambling to re-assess recovery trajectories which also dented market confidence. Asia was a bright spot as the largest economies there appeared to be avoiding the worst.
  • New deaths in developed countries remain below April highs despite new cases being far higher. However, deaths are rising rapidly in Europe as are hospitalisations which is threatening to overwhelm the health system in some countries.
  • Global equities declined in October. The US presidential election and rising Covid-19 cases in many countries, notably across Europe, were the main focus for investors.
  • The 2020 US election comes at a historic time, with the global economy in the grips of a pandemic, central banks unleashing massive stimulus and trade relationships fraying.
  • The IMF has predicted that China’s economy would expand by 1.9% in 2020 following its rapid recovery from the coronavirus pandemic.
  • Compared with other global equity markets, Australia performed well in October. The US S&P500 Index was down -2.8%, the Nasdaq down -2.3% and the Dow Jones lost -4.6%. European markets were very soft on new lockdowns with the UK FTSE100 down -4.9% and the German DAX tumbling -9.4%.
  • The ASX edged higher +1.9% in October as deal making helped to offset rising COVID-19 infections in the northern hemisphere and amid increasing nervousness around the looming US election.
  • In Australia, consumer confidence continued to rise, NAB business conditions rebounded further to +0.4 in September (previous: -6.2), and business confidence rose to a still weak -3.8 (previous: -8.2). The October Westpac Melbourne Institute consumer sentiment rose 11.9% (previous: +18.0%).
  • Domestically, Governor of the RBA, Philip Lowe, confirmed that based on the local economy’s current outlook, the cash rate is not expected to increase for at least three years.