Outlook for Investment Markets
World equity markets have recovered from their large May/June sell-off, as investors became less worried that monetary policy in the US was going to be tightened prematurely. Continued economic recovery in the US, and some positive signs elsewhere (notably a modest pickup in economic activity in the previously battered Eurozone) have also helped improve the outlook for growth assets. In New Zealand, already good economic data have become even stronger, and equities and property should benefit, though there is the unusual prospect (by current developed economy standards) of the Reserve Bank having to raise interest rates to defuse the housing market. The business cycle outlook continues to be quieter in Australia.
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