Global markets swing upward on generic good sentiment

Share Markets: 

It was a positive end to the week for global equity markets.

The MSCI world index (a composite of developed equity markets) hit a record high.

While there was no real catalyst for the move, last Wednesday's Federal Reserve FOMC announcement continued to reverberate.

In the US, the Dow and the S&P 500 gained 0.9% and the Nasdaq was up 0.7% reaching a 15-year high.

Interest Rates: 

US bond yields fell as investors continued to consider a slower approach to raising interest rates from the Federal Reserve, following last week's meeting.

Comments from Fed officials were mixed, with Chicago Fed President Evans (a dove) preferring 2016 for the first rate hike, while Atlanta Fed President Lockhart (also a dove) was happy with June, July or September and said while the stronger US dollar was a concern, it was "not a game changer".

Foreign demand for higher-yielding US bonds (while German yields remain close to record lows) weighed on US bond yields on Friday night.

Foreign Exchange:

The US dollar was broadly weaker amid ongoing speculation the US Federal Reserve may move slowly in raising interest rates.

The Aussie dollar strengthened versus the US dollar, although it has lost ground on a trade weighted basis.

AUD/USD was trading around 0.7780 at the time of writing, up more than one US cent from Friday morning.

AUD/NZD fell to a low of 1.0258 early Saturday morning, which was a fresh post-float low.


Commodities were generally stronger, with gold continuing to benefit from expectations the Federal Reserve will move slowly in raising rates, following the FOMC meeting last week.

Copper prices jumped amid concerns about supply in Indonesia as a labour protest shut the world's second largest mine. Iron ore defied the trend, with prices continuing to decline on concerns about demand from China.


RBA Governor Stevens spoke on Friday, and gave a brief snapshot on the Australian economy. Stevens said that the transition occurring was not as seamless as any of us would like.

However, he reminded the audience that given the large swings in the terms of trade (ratio of export to import prices), that a period of sub-average growth that "we will have done far, far better than in any previous event of this kind".

On the Australian dollar Stevens said that there has been a significant decline in the A$, but probably not enough.

Stevens was vague on the outlook for interest rates saying that the bank "has talked about lowering them further" and that it was a question of whether rates should stay steady or go down.


MNI Business conditions slipped 0.6% from February to 52.2 in March.

New Zealand:

ANZ Job ads rose 0.7% in February, for annual growth of 7.8%.

New Zealand consumer confidence edged 0.5% higher to an index reading of 124.6 in March according to the ANZ-Roy Morgan measure.

The index is down from a peak in early 2014, but suggests a high level of optimism remains among consumers.

United States:

The US leading index was in line with consensus expectations rising 0.2% in February, following a similar increase in January.

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