On Wednesday the IMF cut its world growth forecast for 2016 by 0.2% after data from the first half of this year revealed growth was only 2.9% rather than the 3.3% expected. But as they say, it’s always easier to get the past right than the future. When outlining possible causes for this decline the IMF pointed the finger at commodity prices which have reached an all time low, having fallen past the GFC nadir some time ago. Add to that the fact that global trade growth has been negligible for the past four years, and now even in decline, then this global trade recession might be a potential explanation.
Despite this, the All Ords finished the week nearly 2% higher at 5304, ending with 5 rises in a row. This oddity also comes in the face of historical record dictating that October is a month of pessimistic expectations and poor performance on financial markets. The AUD has also been stronger against a weak greenback this week, remaining above USD0.70 and even staying above USD0.72 for a brief period.