DelphiNews May 2018

I’m pleased to enclose the May edition of DelphiNews.

Market Update

The global economy lost some momentum in the March quarter, but fundamentals remain robust.

US core inflation measures are rising, which is flowing through to longer-term expectations and pushing yields higher.

The threat of a trade war between the US and China continues to be a source of significant uncertainty for markets.

Australians will receive cuts to income tax as anticipated, while public infrastructure spending should help bring the economy closer to capacity.

Inflation in the euro area remains sluggish, with core inflation falling sharply from 1.0% to 0.7% in April.

Economic Update

Which key events have been driving markets? Watch this video of Senior Economist Bob Cunneen in discussion with Portfolio Specialist, Sinead Rafferty.

They discuss:

European and Japanese markets outperforming the US in recent weeks
the market impact of the recent budget announcement, and
the impact of rising interest rates in the US on the Australian dollar

Chart of the Week: The end of cheap money

Global growth and share markets have benefited from ‘cheap money’ over recent years.

A measure of how cheap money is can be seen in the real interest rate. This is measured by taking the cash interest rate and then subtracting inflation. The real interest rate is used by central bankers to gauge whether their policy stance is easy or restrictive for economic growth and financial markets.

Please contact us if you have any questions regarding these articles or to discuss your financial requirements.

Regards

Vince Dore CFP
Director

Vince Dore and Delphi Financial Management Pty. Ltd are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, trading as Garvan Financial Planning/MLC Financial Planning an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax and/or legal advice prior to acting on this information. The material contained in this newsletter is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this email.

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