Every month, the Reserve Bank of Australia (RBA) releases a chart pack filled with an enormous amount of information – it’s a treasure trove for investors.
This month’s chart pack, released on 5 April, contains charts covering the usual range of topics, including economic growth in Australia and the world economy, inflation, commodity prices, interest rates, currencies and exchange rates, banking indicators and so much more. I encourage those interested to dive into the chart pack. Here is the link: https://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf?v=2023-04-10-11-28-20
Over the next few days, I’ll pick out some interesting charts from the pack and highlight points of interest. The first charts selected show interest rates, one of the most important factors determining prices in investment markets.
Source: RBA April Chart Pack
It’s easy to observe at a glance how rapidly interest rates have risen all over the world. What is not apparent in the charts is that we have probably either come to the end of the rate rising cycle or else we are very close to the end. As most readers would know, at its last meeting the RBA chose to leave the official cash rate at 3.6% rather than raise it once again. This is good news for markets, as rising rates tend to depress asset prices. If rates plateau at these levels or even start to fall later in the year, this is likely to boost market prices.
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Investment in securities and other financial products involves risk. An investment in a financial product may have the potential for capital growth and income but may also carry the risk that the total return on the investment may be less than the amount contributed directly by the investor. Investors risk losing some or all of their capital invested. Past performance is not a reliable indicator of future performance.