October was characterised by US-China trade tensions and increasing concerns over the sustainability of the AI investment boom.
Nevertheless, global equity markets demonstrated resilience, buoyed by strong corporate earnings, central bank’s interest rate cuts, and the prospect of increased government spending in Japan and Europe.
New Zealand’s sharemarket rose 1.9% in October, boosted by lower short-term interest rates and positive trading updates from selected companies.
The Australian sharemarket rose by just 0.4%, where higher than expected inflation dampened investors sentiment and reduced confidence in near-term interest rate cuts.
Global bond returns were supported by mild global inflation outcomes and interest rate cuts by the US Federal Reserve.
Financial markets in New Zealand and Australia are well positioned compared to global peers and are likely to benefit from low short-term interest rates.