Over the past week Australian shares rose 1.5% with small company shares up 0.8%. Shares in developed countries fell 0.2% while the US market was flat. Shares in emerging markets were down 1.0%. The Australian dollar fell 1.2% to 75.81 US cents. The Australian 10-year bond yield increased slightly to 2.82% while the US 10-year bond yield remained at 2.96%. The oil price fell 0.4% to 68.38 US dollars per barrel.
Over the past two weeks we have detailed our core global economic scenario, “Late stage synchronised growth, well managed”, and our secondary scenario, “Late stage synchronised growth, policy mistakes”.
There are also other global economic scenarios that we consider, although we believe their likelihood to be much lower. These are detailed briefly below:
Scenario analysis is an important portfolio construction technique. For each of the six global economic scenarios we have detailed over the past few weeks, a different portfolio would be ideal. We aim to construct portfolios which perform well across a range of economic scenarios.
David Bell | Chief Investment Officer
Past performance isn't necessarily an indicator of future performance.
Data sourced from Bloomberg.