Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
World financial markets have become less concerned about North Korean risk, equities have largely recovered from previous setbacks and “safe haven” buying of government bonds has eased back. Whether the more relaxed mood is warranted remains to be seen. The world business cycle continues to improve, providing a generally good backdrop for corporate profits, though partly countered by some major central banks readying to remove some of their previous monetary policy support.
Although there are hints of improvement, there is still no strong evidence the Australian economy has broken out of its period of slower than usual growth, which will be a precondition for better returns from local equities and property.