News

Forget the Budget and looming federal election, Australia’s biggest news was the Senate’s unequivocal support for Innovation. It was an impressive day in politics with all sides (in both Lower and Upper Houses) supporting and passing a Bill which creates generous tax incentives for innovation investment.

Oil is back in the headlines with the breakdown of discussions in Doha over the weekend. Iran didn’t even want to come to the table, and the remaining 20 largest producers couldn’t come to an agreement. This has left the oil price at the mercy of excess supply.

In January, Kuroda’s Bank of Japan (BOJ) joined the NIRP (Negative Interest Rate Policy) club. It was not well flagged, which suggested it was possibly a last ditch attempt to help stimulate the ailing economy.

Major economy central banks were centre stage in March. The RBA left rates on hold, as did the BOJ & US Fed. The ECB shot the “big bazooka” which meant a rate cut further into the negative of -0.4%, an increase in money printing from €60b to €80b per month, and an extension of money printing to include investment grade European Corporate debt. With the US on hold and their acknowledgement of fewer interest rate rises this year, markets gained confidence. Commodities and stocks rallied, with the US markets outperforming the rest, up nearly 7% in the month. The USD weakened against most currencies on the dovish Fed, which saw the Australian dollar spike around 7% to 76c. The stronger Australian dollar meant international unhedged assets underperformed. Australian yields rose during the month causing bonds to underperform.