March eNewsletter

Welcome to the first edition of our newsletter for 2012.

We have experienced a turbulent start to the year, particularly from a domestic political standpoint, and the broader global economy continues to gain much media attention. 

As you are well aware, Julia Gillard comprehensively beat Kevin Rudd in the battle for the leadership of the Labor Party and Government.  Subsequently there has been a minor re-shuffle of Cabinet including the propulsion of Bob Carr to the Foreign Ministry and the Senate seat Senator Abib vacated when he was ejected from Parliament.  Political commentators say there’s now a greater likelihood that the Gillard Government will go to full term.

In the first quarter 2012, the US is showing early signs of a cautious recovery however lingering concerns about the Eurozone Crisis continue to dominate global economic news. Confidence in global markets has improved since the lows in late 2011 with the immediate threats dissipating as policy makers agreed on a Second Greek bail-out package and the European Central bank provided funding support to European banks.

Clearly, the European economy is likely to remain volatile as the cycle of liquidity injections and debt restructuring continues for effectively insolvent European sovereigns. Whilst most recent news has been focussed on the Greek bailout packages it is the risk of contagion to larger economies of Portugal, Ireland, Greece, Spain and particularly Italy that poses a greater risk to global growth forecasts.

In this edition, we take a look at the interest rates, in light of the RBA’s surprise February decision to keep rates on hold, when many predicted a decrease.  Latest news reports that the RBA’s March announcement to continue to hold interest rates, might just set the scene for the year ahead.  We also give you some good money habit tips to increase your wealth and share a story from one of our long-term clients, Ned Tidswell.