Global share markets whipsawed around during August, primarily due to the back and forth tariff announcements between the US and China, together with signs that a global economic slowdown is in progress. Following a strong couple of months, the Australian market fell 2.9% following a lack-luster profit reporting season while US shares fared better to be down just 1.8%.
Elsewhere, the UK market was down 5% as confusion reigned over the pathway for their exit from the EU under the direction of the UK’s new Prime Minister Boris Johnson. Europe was essentially flat supported by expectations that the ECB would introduce new stimulatory measures to boost the flagging EU economy.
Global bond markets were very strong with US 10-year bonds 56 basis points lower on the expectation of at least two rate cuts by the Fed while Australian 10-year bond yields fell a more modest 19 basis points. The USD was firmer against the major cross rates while the AUD fell 1% against the greenback. In commodity markets, the iron ore price fell a whopping 24% as supply resumed from the Vale mine in Brazil, while gold surged 6% on safe haven buying.