Economic Update June 2019
Summary
Markets grapple with uncertainty
May proved a challenging month for global investors, with equity markets selling off. The US S&P500 was down 6.6%, a decline that was mirrored globally. In Australia, the S&P ASX 200 bucked the trend, rising 1.1% in May, bolstered by the market’s
positive assessment of the Federal election outcome, solid commodity prices (in particular iron ore, which jumped over 10%), and the increasing likelihood of monetary policy easing from the Reserve Bank of Australia (RBA) in the near term.
Global: Selected global equity markets
Global trade tensions weigh, Fed dovishness supportive

Source: IFM Investors, Macrobond
The primary factor driving global markets lower was an intensification of global trade tensions over recent weeks. In early May hopes of a new trade deal between the US and China were dashed by US President Donald Trump and then, later in the
month, trade was again used as a blunt diplomatic tool, this time directed towards Mexico.
These trade tensions and threats to global economic stability have caught the attention of central bankers worldwide. Most notably US Federal Reserve (Fed) Chair, Jay Powell noted that they are “closely monitoring the implications of these
developments for the U.S. economic outlook”. It has become clear that the Fed is alive to downside risks that could see it ease monetary policy.
About the author
Chief Economist
Alex Joiner, PhD
Joined in 2016
Bachelor of Economics (Hons) (Latrobe University), PhD (Econometrics) (Monash University).
Alex is IFM Investors’ Chief Economist and has more than a decade of experience in the field. He is responsible for the firm’s economic, financial market and policy analysis and forecasting. Alex is also a member of the firm’s Investment Committee. Prior to joining IFM Investors, Alex was the Australian Chief Economist for Bank of America Merrill Lynch. In this role, Alex was responsible for providing economic insight and forecasts across asset classes and conveying these views to both domestic and global investors. Alex was also previously a Senior Economist at the ANZ Bank.