During March:
- Global growth prospects for 2023 have improved significantly since December, says Fitch Ratings in its latest Global Economic Outlook report, but the impacts of rate hikes on the real economy still lie ahead and are likely to push the U.S. economy into recession later this year.
- Fitch now forecasts world growth in 2023 at 2.0%, revised up from 1.4% in December 2022. Fitch has raised China’s 2023 growth forecast to 5.2% from 4.1% in December, eurozone growth to 0.8% from 0.2% and U.S. growth to 1.0% from 0.2%.
- Fitch has now lowered their global growth forecast for 2024 to 2.4% from 2.7% to reflect the lagged impact of rapid U.S. Fed and ECB interest rate hikes.
- Share market performance in both the U.S. and Australia was positive for March. The S&P 500 rose by 7.03% for the quarter, while the Australian S&P 200 rose by 1.98%.
- In Australia, Quality and Equal Weight were the best performing styles for the quarter. Small caps, according to the MSCI World Index, was the only style to produce a negative return (-0.1%). Globally, Growth and Quality were the best performing styles, with Momentum being the only style in negative territory.
- Within Fixed income markets, both government bonds and credit gained ground this quarter. The main Australian fixed interest index, the Bloomberg AusBond Composite 0+ Years Index gained 4.6%, while the Bloomberg AusBond Credit 0+ Years Index gained 3.4%.
- Global High Yield bonds, as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged into AUD gained 2.3% for the quarter.
- Given the whole Australian Government yield curve is now lower than it was one month ago, composite Australian Fixed Interest funds are now looking somewhat less attractive, when compared to a month ago, but are still significantly more attractively priced than they were at the start of 2022.
Read more in the Monthly Economic Wrap here.
