MARKET UPDATES
- WIF Team
- Apr 16
- 3 min read
Updated: May 7
Key Takeaways
Global Markets: Trade tensions continue to drive market volatility, with investors seeking safe-haven assets amid economic uncertainty.
Australian Economy: Facing external shocks and internal fiscal challenges, the economy is showing signs of strain, with potential for further rate cuts.
Political Landscape: The federal election has brought economic policy to the forefront, with both major parties proposing significant spending measures that are under scrutiny for their long-term viability.
Global Financial Markets: April 2025 Update
Global financial markets are experiencing heightened volatility as a result of escalating trade tensions and shifting investor sentiment. President Donald Trump's recent 90-day pause on all reciprocal tariffs (except those imposed against China) provided temporary relief, boosting Asian stocks and raising hopes for de-escalation of the trade war. Despite this, markets remain jittery. Since the S&P reached its all-time closing high on 19 February 2025, The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have respectively fallen by 14.9%, 17.6%, and 22.2%, as of the closing on April 7 — reflecting investor concerns over the economic impact of the trade conflict (Williams 2025).
The U.S. dollar has also weakened, reaching a six-month low, with investors moving away from U.S. assets and towards European and Asian assets, with the euro rising to its strongest level in three years. (Karamanis, Wong & Glass 2025). In response to these developments, U.S. Treasury bonds, traditionally considered a safe haven, are now trading with increased volatility, signalling growing concerns about their stability.
The U.S. dollar has also weakened, reaching a six-month low, with investors moving away from U.S. assets and towards European and Asian assets, with the euro rising to its strongest level in three years (Karamanis, Wong & Glass 2025). In response to these developments, U.S. Treasury bonds, traditionally considered a safe haven, are now trading with increased volatility, signaling growing concerns about their stability.
Australian Economy, Federal Election and Budget 2025-26
Australia's economy is under pressure from global trade uncertainties and domestic fiscal challenges. RBA has warned that the ongoing trade war could lead to slower growth and higher inflation, prompting markets to anticipate up to five interest cash rate cuts this year. (Lefort, 2025).
Consumer confidence has declined to a six-month low as a result of the brewing trade war, with households expressing concerns over rising job insecurity and reduced spending capacity (Bowen, 2025).
The upcoming federal election has intensified political debate over economic policies. The Albanese government proposes a $2.4 billion instant tax deduction for work expenses, while the Coalition offers a $10 billion cost-of-living tax offset. Economists have criticized both proposals as short-term measures lacking long-term economic strategy (Mizen, 2025) (Coorey, 2025). Additionally, both parties have unveiled housing policies involving significant financial commitments, such as Labor's pledge to build 100,000 homes and the Coalition's tax rebates on mortgage payments for first-home buyers. Critics argue that these initiatives may exacerbate fiscal instability without addressing underlying supply and affordability issues.
Until next time!
Bowen, S. (2025, April 8). Australian consumer confidence plunges to a six-month low. The Motley Fool. https://www.fool.com.au/2025/04/08/australian-consumer-confidence-plunges-to-a-six-month-low/
Coorey, P. (2025, April 12). Dutton pledges a tax cut of up to $1200 for 10 million workers. The Australian Financial Review. https://www.afr.com/politics/federal/dutton-pledges-tax-cut-of-up-to-1200-for-10-million-workers-20250412-p5lr92
Karamanis, V., Wong, M. & Glass, M. (2025, April 11). Dollar Emerges as Latest Victim of This Week’s Markets Mayhem. Bloomberg. https://www.bloomberg.com/news/articles/2025-04-11/dollar-emerges-as-latest-victim-of-this-week-s-markets-mayhem
Lefort, C. (2025, April 7). Traders eye up to five RBA rate cuts amid market turmoil. The Australian Financial Review. https://www.afr.com/markets/debt-markets/traders-expect-up-to-five-rba-rate-cuts-amid-market-turmoil-this-year-20250407-p5lpo0
Mizen, R. (2025, April 13). Albanese pledges new standard $1000 tax deduction.The Australian Financial Review. https://www.afr.com/politics/federal/dutton-pledges-tax-cut-of-up-to-1200-for-10-million-workers-20250412-p5lr92
Williams, S. (2025, April 10). The S&P 500 Just Endured Its 5th Biggest 2-Day Decline in 75 Years -- and History Is Crystal Clear What Happens Next for Stocks. The Motley Fool. https://finance.yahoo.com/news/p-500-just-endured-5th-070600300.html
Comments