Outlook for Investment Markets
The global economy in aggregate is ticking along, with positive economic growth against a backdrop of very benign inflation and very accommodative policy settings. The growth, though, is quite varied across the globe – the U.S. has been leading and China has been slowing down – and the fall in the oil price has been positive, with a lot of the resulting dividend still to work through over the next year. That's given central banks the latitude to cut interest rates, including in Australia. Locally, not a lot changed either, with the Australian economy still growing more slowly than usual, while the New Zealand economy was still performing strongly, although now past its point of peak growth. What is of concern is that valuations across many asset classes are high and emphasise the growing risk to the downside.
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