• Another record high for share markets at March end, on the back of expectations of US interest rate cuts later this year along with hopes of continued resilient economic growth.
  • In local currency terms the US S&P 500 gained +3.1%,  the  ASX 200 rallied +3.3% whilst the MSCI World ex-Australia Net Total Return Index rose +3.1% in AUD terms.
  • Reserve Bank of Australia (RBA) left interest rates unchanged at 4.35% as headline inflation data remained broadly stable at 3.4% y-on-y, with the services component sticky.
  • RBA Governor Michele Bullock indicated a flexible approach to curb inflation amid economic growth slowdown, emphasizing that the interest rate path remains uncertain and data dependent. Headline inflation stood at 4.1% in Q4 2023, down from 5.4% in Q3 and a peak of 7.8% in Q4 2022.
  • Australian Consumer Inflation Expectations dipped to 4.3% in March 2024: from 4.5% in February, the lowest level since October 2021. This easing is attributed to a moderation in goods prices following rate hikes totalling 425bps over the past two years by the central bank.
  • Australian jobs data came in better than expected with the unemployment rate falling to 3.7%., and job vacancies dropped 6.1% in the three months to February. National houses prices rose +0.6% m-on-m in March to be up +9.7% y-on-y.
  • Several Central Banks met during March. The US Federal Reserve maintained the Fed Funds rate at 5.25%-5.5% for a fifth straight meeting. The market is expecting the first rate cut in July but seems to be pushing it out due to robust economic data and sticky services inflation.
  • European Central Bank indicated it could cut interest rates as soon as June, given the fall in inflation and continued subdued economic growth.
  • China’s economy shows signs of awakening with manufacturing data showing signs of improvement for the first time in five months. But property investment and consumer confidence remain restrained.
  • Bank of Japan increased short-term interest rates to 0-0.1%, the first time since 2007, while the Swiss National Bank unexpectantly cut rates 0.25%.
  • Risks to the outlook for the global economy have become more balanced as inflation has eased, but global financial stability risks remain elevated.
  • Many market participants have priced in an easing in monetary policy, likely later this year, with inflation returning to central banks’ targets. This leaves markets vulnerable to an adverse shock, including from inflation proving more persistent than expected or a severe geopolitical event.
March 2024 Download Report