Equity markets built on the strong gains recorded in March to post further impressive results in April. The US led the way once again, recording an impressive 5.3% rise buoyed by expectations of a gradual reopening of the economy together with the announcement of fiscal stimulus packages totalling a staggering $6 trillion by the Biden administration. US GDP for the March quarter rose by an impressive 6.4% to be now approaching the aggregate level reached just prior to the pandemic.
The Australian market also posted an impressive gain, advancing by 3.5% driven largely by strong performance from technology and materials stocks. The burgeoning iron ore price, which is now approaching US $200 a tonne, boosted the performance of Australia’s major miners and pushed the AUD to 78c against the greenback.
Inflation concerns that caused market unrest during February have subsided for now, particularly following confirmation that the Australian CPI increased by just 1.1% over the 12 months to the end of March. The RBA reaffirmed that inflation was not an immediate concern as they maintained their monetary policy stance. Bond markets were placated by this news with yields subdued over the month.