Welcome to the April edition of our newsletter – a few weeks later than normal but we’ve had a few things going on this month. I’ve had a couple of weeks off work after surgery but am recovering well and Heather has cracked the whip and insisted I stop slacking off and get back to work. A great big thank you to the team for keeping things ticking over in my absence.
The war in Ukraine added a major new source of uncertainty to the local and global economic outlook in March. Economic sanctions against Russia have cut its oil exports, sending crude oil prices surging 6% over the month to more than US$111 a barrel. This puts further pressure on inflation, already on the rise as global economies recover from the pandemic. In the US, inflation is at a 40-year high of 7.9%. The US Federal Reserve lifted official interest rates in March for the first time since 2018, by 0.25 basis points to a range of 0.25-0.50.
In Australia, the lead-up to the Federal Budget added to the uncertainty. The Reserve Bank is taking a “patient” approach on interest rates for now, but with inflation at 3.5% and tipped to go higher it is expected to begin lifting rates later this year. Australia’s economy grew by 3.4% in the December quarter, the strongest gain since 1976 as the nation emerged from lockdowns. Unemployment fell from 4.2% to 4.0% in February, but rising prices are putting pressure on household budgets. Petrol prices hit a high of $2.12 a litre in March, costing the average motorist an extra $66.20 to fill their tank since the start of the year. Fortunately the Federal Government has provided some relief with a halving of fuel levies for 6 months.
Rising commodity prices – iron ore and wheat were both up almost 5% in March – pushed the Aussie dollar to around US75c.
The Federal election has now been called and we have another 4 weeks to decide who should lead our nation for the next 3 years. I’m hoping the next few weeks will bring some clarity around each of the major party’s plans for our future (and how they will finance them), especially for our regional areas and how we can responsibly make the transition to lower emission energy sources. This is an important time for our nation – choose wisely.
From all of us here at Excel Financial Advisors, we hope you had a safe and happy Easter break, and made lots of wonderful new memories!
Stuart Fitzpatrick and Excel Financial Advisors Pty Ltd are authorised representatives of Interprac Financial Planning Pty Ltd AFSL 246638 registered office at Level 8, 525 Finders Street, Melbourne VIC 3000. This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.