Geopolitical volatility across the Eurozone, stagnating Chinese growth and uncertainty over rate movements in the U.S. have begun to take its toll on domestic and global markets.
Global indices began to feel the full force of investor uncertainty, with excessive selling pressure plunging share prices into a downward spiral. Whilst U.S. stocks were heavily hit, emerging markets arguably suffered a worse fate slumping by 17.78% in the third quarter of 2015.
On the domestic front, the local stock market suffered substantial falls primarily due to a dampening resources sector, as Chinese steel production fell and commodity prices continued their downward trend.
In the property market, whilst prices remain strong, the sector may begin to cool by early 2016, as population growth slows and oversupply concerns begin to take hold. Riding the boom as a substitute for a declining mining sector could end up costly, sparking recessionary fears towards the end of the current financial year.
The RBA’s target cash rate remains at a record low of 2% since May 2015. With discretionary consumer spending still relatively subdued and in a volatile economic climate, a domestic increase seems unlikely in the near future. 2015 has thus far seen a depreciating AUD dropping below 70c against the US dollar on the back of falling commodity prices, stronger US growth and employment data and reduced domestic fiscal expenditure. The shock successive devaluations of the Yuan in August remains the hot topic, falling over 3% against the US dollar.
