Market volatility will likely increase amid the U.S. debt ceiling standoff

April was again a very eventful month for the Australian share market which increased by 1.85% over the month to be 2.83% higher over the year. The domestic market was supported by a stronger-than-expected US reporting period which saw the US share market increase by 1.46%. At the end of the month, investors witnessed fading concerns about a run on the US banking system after the US Federal Reserve injected over USD 350 billion. This was short lived, however. In early May, a number of US regional banks saw their share prices sell off considerably as concerns about default increased again. First Republic Bank’s depositor flight, amounted to over 40% in the first quarter – much more than had been expected, causing the share price to plummet. Australian bond prices were flat over the month whilst international bond prices increased by 0.41%. Listed property (REITS) increased strongly (5.29%) given the a more sedate bond market outlook.  Read More

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