A Lack of Confidence Around the World
The world is changing and more and more people are interacting with the world banking system. This gives velocity and momentum to money as markets become more liquid as more service providers and participants join the global community. In a report issues by the World Bank titles Global Findex, it was reported that 700 million more people became account holders with banking institutions around the world. This has dropped the number of “unbanked” individuals to ~20%, or 2 billion adults worldwide. In a statement within the report, World Bank president Jim Yong Kim stated that this access could service as a ‘bridge out of poverty”.
Yesterday was a day for data as Westpac’s Consumer Sentiment fell 3.2% from 99.5 in March to 96.2 in April. This result mirrors last year’s result as the index printed at 99.7 in April and then tumbled 6.8% in the wake of the Federal Budget blues. Confidence is certainly vulnerable and this may be recognition of the budget and anticipation of what is in store for Australians.
Westpac qualifies the results by reminding us that petrol prices have full rebounded back to $1.32 per litre, 75% of the market expected the RBA to cut in their April meeting and then they didn’t, the jobs outlook generally fell and confidence surrounding the housing market further deteriorated as “time to buy a dwelling” dropped 10%.
Chinese and American data failed to meet expectations as Chinese quarterly seasonally adjusted GDP came in at 1.3% down from 1.5% in Q4, 1.9% in Q3 and 2.0% in Q2. This sees the annualised growth of China at 5.2%, well below the 7% the market previously was forecasting. US industrial production and NY manufacturing disappointed which the market sees as another possible impediment in the Federal Reserve’s trajectory to normalise interest rates.