Global Economy – The global growth for the first half of 2020 will be lower than previously expected thanks to the spread of the coronavirus. Just when signs of global growth were improving, this outbreak has thrown a spanner in the works. We will have to wait and see how things pan out. At the moment, inflation and unemployment rates are low globally. Read more below.
Australian Government Bonds & Aussie Dollar – Australian Government bond yields and the Australia $ have both fallen to significant lows.
Australian Financial Markets – no one likes uncertainty and there is a lot of that around the coronavirus. This fear has caused extreme volatility in financial markets. This will continue while investors try to understand the risks and likely effects to our economy. Fear usually stops people spending and this could well affect our domestic market until the virus is under control.
The Reserve Bank of Australia (RBA), in an attempt to support the economy as it faces the global coronavirus outbreak, has lowered the cash rate by 25 basis points to 0.50 per cent.
How did they come to that decision?
The Board of the RBA considered the outlook for the global economy, bond yields, the Australian economy, the Australian labour market, housing market & inflation.
Philip Lowe, Governor of The Reserve Bank, explains everything here in his economic update
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