Welcome to our new monthly QI Newsletter where we keep you up to date on hot topics, interesting content and intriguing articles.
It’s April already and as we head back to work after Easter we hope you enjoyed a peaceful and relaxing holiday weekend. April is generally a quiet month on the national stage as the Government prepares for the May Budget.
It’s been a turbulent few months for global markets however, due to worries about rising US interest rates and more recently, the threat of a President Trump inspired global trade war. In early March, the US Fed lifted its federal funds rate by 0.5 per cent to a target range of 1.5-1.75 per cent, the sixth increase in the current cycle with two more expected this year. US rates are now above Australia’s cash rate of 1.5 per cent for the first time in 17 years, sending the Australian dollar to a three-month low of 76.6c from its January high of US81c. The Fed’s rate hike was expected, but the threat of a trade war was not. Global shares fell sharply in March before a late month pause as hopes were raised that the threat of a global trade war would be averted by negotiation between the US and China. Australia’s trade deficit with the US is already the second largest on record, with the rolling annual deficit hitting $18.5 billion in January from $18.2 billion in December. Our overall trade surplus fell to $11.4 billion in the year to January from $11.9 billion in December.
On a more positive note, Australia’s budget deficit shrank to $18.6 billion in the year to February, the lowest in 9 years, on the back of rising employment and company profits.