May is here, and as the weather begins to cool the political climate is heating up. The federal election on May 18 bookends a busy period on the national political and economic front which began with the Budget on April 2.
Australian financial markets were surprised by an unexpected fall in inflation. The Consumer Price Index, Australia’s main inflation measure, fell from an annual rate of 1.8 per cent to a record low of 1.3 per cent in the March quarter. This is well below the Reserve Bank’s 2-3% target and leaves the door open to a cut in official interest rates to stimulate economic growth. The cash rate has been unchanged at a record low of 1.5 per cent since August 2016. Australia’s 10-year bond rate is at 10-year lows of 1.78 per cent, indicating the market expects slower economic growth.
The Australian dollar fell half a cent on the inflation news and speculation about a rate cut, finishing the month at around 70.5 US cents. But Australian shares jumped to an 11-year high in line with Wall Street where shares hit a record high in response to better-than-expected company profit reports. The news from China was also positive, with economic growth steady at 6.4 per cent in the year to March.
The good news is that inflation is now well below average wages growth of 2.3 per cent per cent. Australian consumers remain positive on the back of lower prices and a strong jobs market. Unemployment held steady at 5 per cent in March, near decade lows.
We’ll know soon enough which party wins Government and whether or not they’ll have a workable majority or will need to negotiate with the minor parties and independents to be able to effectively govern over the next few years.
I would just like to highlight this month’s article on scams, and how we’ve been caught up in one going on right now. There is someone telephoning people stating to be from “Excel Advisors” and offering investments in medical marijuana. We believe the calls are originating from somewhere in the Sydney area, but are powerless to stop them. (As apparently the ATO, ASIC & Telstra are also!)
Over the past couple of months we have received 50+ phone calls from people who have missed calls, listened to the message, then looked up “Excel Advisors” on Google. We have been able to let the people who call us know its a scam and these people have been really understanding, but don’t know how many other people are taking the calls. We’ve had a couple of bad reviews on Google, an abusive rant on Facebook, and a complaint to the Australian Communications and Media Authority. And we’ve got absolutely nothing to do with it.
Please be careful of emails with files attached, clickable links or phone calls from people you don’t know, they could cause you major disruption or even worse identity theft.