Transcript:

Welcome to this week’s Market Minute, a short video where we break down what’s happened in markets over the past week. I’m Matt Wilkinson.

Global investors remain focused on the upcoming Federal Reserve policy meeting on 9–10 December. Expectations have firmed around a 25-basis-point cut to the Fed funds rate—thanks to growing evidence of cooling labour markets and softening economic activity. This optimism helped prop up U.S. equities — major indices rallied as sentiment turned more dovish. Meanwhile, safe-haven assets such as gold have seen renewed interest, supported by the dovish tilt ahead of next week’s decision.

Turning to Australia, new data from the Australian Bureau of Statistics shows the economy grew by 0.4 per cent in the September quarter, bringing the annual growth rate to 2.1 per cent. While headline GDP growth undershot some forecasts, the underlying details point to resilient private demand, supported by both household consumption and business investment.

That said, inflation remains elevated and broader cost pressures continue to challenge policymakers, limiting scope for easing by the RBA anytime soon.

For investors with both Australian and global exposure, this mix of global monetary easing potential and solid domestic demand is worth noting. A U.S. rate cut could further ease global borrowing costs and support growth assets — reinforcing demand for yield-sensitive sectors and longer duration assets. At the same time, persistently high inflation locally suggests Australian fixed income may remain under pressure, albeit we believe value has started to appear in Australian government bonds.

In summary, global markets seem tilted toward a Fed-led easing cycle, offering a supportive backdrop for growth stocks and risk assets — while Australia’s economy continues to chug along, albeit with mixed signals on inflation and monetary policy. These conditions should support our mild overweight to global equities. And as always, our approach remains to hold a diversified portfolio of high-quality strategies that can navigate through a range of market conditions.

Thanks for watching. We’ll return next week after the FOMC decision with a full update on the global and Australian market-economy outlook.