I’ll start with the US this week where things have been a little rocky, with the Dow Jones falling nearly 2.5% early in the month but then gradually gaining it back, only to then suffer a blip on 22nd where it fell 1.77%. This was off the back of concerns for the health of the global economy. It started in Germany with an index for manufacturing falling to it’s lowest level since 2012, which pushed the yield on the German 10 year note into negative territory. This sparked a sell-off in European shares. This carried to the US pushing the 10 year treasury note from 2.59% to 2.44%.
This “blip” occurred on a Friday and by Monday reached Australia. Prior to this we had seen a relatively flat month, but the 25th March saw the market drop around 80 points. So at the time of writing we are now just over 1% down for the month.
Arguably the sell off was overdue. Markets had been trending upwards off the back of the US fed reserve shifting to the sidelines and also due to hopes of a trade deal between the US and China. But, it’s actually been suggested that tariffs may not in fact be taken off the goods from China, and time will tell on this one.
The $AUS fell quite sharply early in the month from 72c to 70, but has since regained a little value to a current level of 70.8c to the $US.