Market Wrap - May 2021
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As part of the 2021/22 Federal Budget, the Treasurer reiterated the importance of border reopenings. This will enable the Australian economy to benefit from tourist spending, and should lift migration levels.
There is a concern that it might not be possible to maintain strong economic growth without the arrival of highly-skilled immigrants.
Overall news flow remained supportive of risk assets including equities and credit and enabled most major share markets to make positive progress.
There was increasing discussion about the possibility of interest rate increases in key regions, to counteract gathering inflationary
pressures. This saw bond yields rise, and adversely affected the performance of fixed income markets.
In spite of the generally positive mood investors remained concerned by the ongoing spread of the Delta variant of Covid-19, and whether it could derail the recovery in major economies.
