September witnessed an out-sized rate cut by the US central bank, renewed stimulus measures by Chinese authorities, and continued rate-cut resistance from the Reserve Bank of Australia. We remain optimistic but cautious about the market outlook and, while we expect a modest consolidation of recent moves, at this stage the catalysts for a significant selloff are not present.

Early August witnessed extreme volatility in equity markets but by month’s end most markets had fully recovered their losses. Rate cut expectations became more pronounced over the month.

There seem to have been several factors that have come together and given us this period of turbulence and they're all somewhat interrelated but they're all also independent, but they've all come together to have quite a significant impact over the period of a couple of days earlier in August.

Global equity markets have moved sharply lower in recent days on fears that the risk of recession may now be higher than investors had previously expected. Market interest rates have moved sharply lower for similar reasons.

July was a month of “rotation” in equity markets, weaker commodity prices, and further easing in global inflation pressures. This shifting dynamic resulted in rising hopes across the globe for policy rate reductions.

Influenced by news of slowing inflation and growth momentum in the US in particular, June was a positive month for most global equity and bond markets (with bond yields falling). French markets were an exception as political uncertainty rose with the calling of an early election.

Last night in the US two key events occurred – the release of the May Consumer Price Index (CPI) and the latest Federal Open Market Committee (FOMC) announcement. The CPI had more market impact.

May was a month of two halves for equity and bond markets. In the first half of the month equity and bond prices rose (bond yields fell), but the second half of the month witnessed a turnaround taking many equity markets lower from record intra-month highs.

Australian and global growth, and earnings remain surprisingly resilient as the outlook for the timing (and likelihood) of central bank policy cuts remains key.

Australian and global growth, and earnings remain surprisingly resilient as the outlook for the timing (and likelihood) of central bank policy cuts remains key.