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Global economy, Equity, Fixed Income, news, Australian economy
February proved to be a truth or dare month with equities. The Australian reporting season was one of the best ones in years, as profits surged 18% to the December calendar end. 55% of companies beat estimates, with the main outperformer being resource related stocks.
Overall the ASX200 started the month strongly but gave up the bulk of the gains by month’s end. Aussie stocks still managed to close 2% higher.
Australia recorded a record trade surplus, thanks to commodity exports and prices. NAB Business conditions are better, but capital expenditure remains mute. The RBA left cash rates on hold.
The Eurozone was further put in to question as Marine Le Pen’s popularity grew in France. She represents France’s far right, and advocates a Eurozone exit. Le Pen’s poll movements were reflected in German Government Bonds (Bunds), as they were bought on a safe haven basis, causing yields to fall.
Global equities also finished the month in positive territory, with the US’s Dow Jones Index touching 12 consecutive days of new highs. US Stocks closed almost 4% higher, with European markets adding almost 3%.
The USD strengthened over the month by 2% after the US Federal Reserve almost confirmed rates would rise in March, and also on Euro sentiment. The AUD remained bid (up nearly 1c), thanks to commodity demand.
