Ph (07) 4772 5333

Economic Update – April 2022

In this month’s update, we provide a snapshot of economic occurrences both nationally and from around the globe.

Key Points

  • US inflation pushes higher and the US Fed starts hiking interest rates
  • The Ukraine invasion by Russia has not escalated beyond expectations but has become more protracted
  • Commodity prices and $A bounce on the Ukraine invasion and Australian economic data very strong
  • The world re-opens despite Omicron and now BA2 but lockdowns in China continue to impact supply chains
  • China economy bounces back from a weaker second half of 2021

 

We hope you find this month’s Economic Update as informative as always. If you have any feedback or would like to discuss any aspect of this report, please contact our team.

The Big Picture

While the devastation and casualties continue to mount in the Ukraine, worst-case scenarios seem thankfully to have been avoided – at least so far.

The resilience of the Ukrainian people has reportedly been outstanding. The West has contributed in many ways but it has not attempted to inflame the situation by moving troops too close to the action – or firing our own missiles.

As is usual, markets fell sharply on the first bad news but recovered after having realised they had priced in a worse outcome. With media outlets almost calling a stalemate in the Ukraine with Putin having failed, so far at least, to achieve his objectives (whatever they may have been), it would take fresh bad news to shake the market again. There is opinion forming that Putin might even be at risk of being ousted as leader.

Some of the success in preventing a worse outcome can be attributed to the co-ordinated sanctions being placed on some trade and the assets of the so-called seven oligarchs that amassed great wealth from links with Putin.

Superyachts, planes and property have been seized by various countries. The impact on the Russian economy has reportedly been massive. At the start of March, the Russian Central Bank increased its base interest rate from 9.5% to 20% in an attempt to cushion the rapid depreciation of the rouble.

As March drew to a close, there was some optimism that Putin was considering a ‘lesser objective’ and, indeed, recent talks between the two sides is offering a little more hope than previous talks.

While Ukraine is rightly taking centre stage on TV news, the great economic news from Australia, the US and China might have largely flown under the radar.