Most share markets gained during January. Investors were shocked as the US Department of Justice (DOJ) served a subpoena to US Federal Reserve Chair Jerome Powell over the Fed’s HQ renovation expenses, with Chair Powell publicly suggesting the move was tantamount to political pressure. The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% and struck a data dependent tone. US December core CPI eased to 2.6% YoY (vs 2.7% expected) while Australian inflation rose to 3.8% YoY, above analyst expectations of around 3.5%, lifting near term RBA hike odds.
Tensions between the US and its NATO allies flared during the month as President Trump announced punitive tariffs on eight countries over the Greenland dispute. A round of talks in Davos produced a new Arctic security “framework” and the tariff threat was withdrawn.
The ASX300 advanced 1.7% while A-REITs declined (-2.7%). Currency-hedged global shares returned 1.7% while unhedged global shares slid (-2.8%), impacted by the AUD’s strong gain against the US dollar, Euro and Japanese Yen. Australian bond yields rose a little, curbing gains for the Australian bond index which returned 0.2% for the month.
Disclaimer
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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