SFG October 2017 Newsletter

Sherpa Financial Group Pty Ltd is a Corporate authorised representative of Integrity Financial Planners Pty Ltd AFSL 225051. Nikitin Lal and Krishna Singh are authorised representatives of Sherpa Financial Group Pty Ltd. This newsletter is of a general nature and does not constitute advice to any individual. You should seek individual and specific advice before making any financial decision based on information contained in the newsletter otherwise failure to seek advice may lead to financial decisions and consequences that are not appropriate to your needs and circumstances and financial loss may be incurred. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns. Any projections are estimates only and made for illustrative purposes only.

October is here after the record-breaking heat of September and all the signs point to a hot summer. Things are also beginning to heat up on the global interest rate front. The US Federal Reserve surprised markets in late September by confirming that not only will it begin winding back its bond buying (or quantitative easing) in October but that it expects to raise official interest rates again in December with three further rate rises in 2018 also on the cards. This is despite persistently low inflation below 2 per cent. The Fed is pinning its hopes on a solid labour market producing higher wages and prices. The US dollar rose slightly on the news, pushing the Aussie dollar back below US80c. The interest rate differential between the US and Australia looks set to widen, with Reserve Bank Governor Philip Lowe confirming in a speech that a lift in rates here is still some way off. Our stubbornly high currency, weak wages growth and booming property market are to blame, although Governor Lowe expressed guarded confidence in Australia’s economic outlook. In another surprise announcement, S&P downgraded China’s sovereign credit rating one notch to A+ for the first time in 18 years due to concerns about rising debt levels. This followed a similar move by Moody’s in May. If China tightens credit in response it could put downward pressure on iron ore prices and the Aussie dollar.

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