Daily Commentary BY THE CURVE TEAM –

RBA To Meet Amidst Ongoing Market Volatility

3rd of April, 2018

Leading into a fairly busy short week, the looming uncertainties that have surrounded the market of late are showing no signs of holding off. The ongoing trade debacle and tech rout remains front and centre as we look towards the RBA’s monetary policy decision today.

Despite showing small signs of recovery late last week, equity markets have continued their decline with the S&P500 closing below the 200 day moving average, a level not broken since mid 2016.

On the trade story, in response to US President Trump’s steel and aluminium tariffs, China has answered back with reports signalling that $3bn of US imports will be at risk.

Tech stocks continue to slide, this time a Tweet from Trump directed at Amazon only added fuel to the fire.

Safe havens continue to be on the bid as volatility drifts higher, the Yen has seen growing support while the US 10year Treasuries continue to trade below 2.80%.

With the RBA due to meet today, the ongoing uncertainties and volatility should be weighing in on the mind of members.

While it is expected that there will be no movement in rates, the rollercoaster within the equity market creates a more uncertain picture around the consumer. Volatility in share prices leave consumers more uncertain about the state of their wealth.

Consumer sentiment and spending has been raised as a big concern for the RBA of late while business conditions appear to be booming.

It is shaping up to be a fairly busy week offshore as well with Canadian GDP as well as crucial Eurozone inflation figures.

Oliver Parsons

Client Relationship Manager