Share markets saw gains in December. US GDP growth surprised analysts, growing by 4.3% on an annualised basis during the 3rd quarter driven by stronger consumer spending, exports and government outlays. The US launched drone strikes on boats and seized tankers in the Caribbean in an effort to stymie fentanyl trafficking, impacting Venezuelan oil shipments. A deadly terrorist attack at Bondi beach in NSW targeting the Jewish community resulted in widespread calls for a Royal Commission into antisemitism.
The US Federal Reserve cut the Federal Funds Rate by 0.25% to a target range of between 3.50%–3.75% (while emphasizing a higher bar for further easing) and also announced circa $40 billion per month in US Treasury bill purchases commencing from December onwards. The Bank of Japan raised its short‑term policy rate by 0.25% to ~0.75%, the highest level in around 30 years. The RBA kept the cash rate on hold at 3.60%, noting upside risks to inflation.
The ASX300 gained 1.4% and A-REITs returned 2.0%. Currency-hedged global shares gained 0.5% while unhedged global shares declined (-0.9%), hindered by the AUD which gained against the USD and the Japanese Yen. Australian bond yields rose during the month, resulting in a (-0.6%) decline for the Australian Composite Bond Index.
Author: Allan Grant - Senior Portfolio Analyst
DISCLIAMER:
The above is intended as general market commentary only and is not intended as, and does not constitute, advice of any kind. No liability is accepted for any action taken based on the above or for any loss suffered as a result of reliance on the same.
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