Australian Bond Exchange

ABX Weekly 31st October 2018 Market update

Everything is fixed! Equities recouped some of the losses over the week. S&P500 currently up 0.8%, while key commodities oil and copper fell amid US-China trade concerns. The US dollar benefitted from disappointing Eurozone data and a Brexit warning from S&P.

The big event this week was the resignation of Angela Merkel as she will step down as Chancellor of Germany. But more on that from our European Desk.

Brewin’ with Nguyen

With all the risk off sentient from other markets over this week I had some feedback from clients that are extremely thankful that they received the coupon payments from their Centuria Fixed and Floating bonds recently. A lot of my clients are retirees and hence living off a fixed amount of assets and the income it provides. At a time when market sentiment was down and the risk of lower or zero dividends, they were grateful that they could rely on the stability of the bond coupons. It is easier to sleep at night knowing that all you have left is safe.

European Desk

The regional election in Germany once again was a big disaster for the two main leading parties and longstanding German leader Angela Merkel. Nobody knows what the full impact will be with the current coalition government in Berlin. One thing is for certain – there will be some changes!! This political uncertainty plus the trade war with the US will keep the ECB on the sideline for the foreseeable future. The recent weakness in the Euro vs the US$ should provide some boost to the European economies but we doubt that this will be enough to offset all this uncertainty created by the political uncertainty all over the continent.

ABX Colour

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