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Australian Market Summary | 10 March 2020

Key market themes

Update on the coronavirus

  • The Italian Prime Minister Tuesday morning announced a nationwide ‘quarantine’ restricting travel without a business or health-related justification until at least April 3rd. Schools and universities are already closed and public events will be cancelled.
  • President Trump plans to unveil a fiscal aid package on Tuesday designed to alleviate some of the pressures on business and individuals in the wake of coronavirus quarantine measures. The package will likely see a payroll tax cut and paid sick leave for those hourly workers quarantined by the virus

US Politics

  • Joe Biden’s success in winning 10 of the 14 states up for grabs at last week’s Super Tuesday has put him in a strong position to win the Democrat nomination and to challenge President Trump at the November election
  • Trump’s questionable handling of the coronavirus contagion has dented his poll standing and seen Biden leap to near enough neck and neck in the odds for


Economic data released

US Economic data finished February strong and untouched by virus concerns

  • Manufacturing data has stabilised with the new year and China trade deal, whilst consumer confidence and small-business confidence remains elevated and untouched by coronavirus fears
  • February payroll data surged by 273,000 jobs

Australian economic data however remains as mixed as ever

  • Weekly ANZ Consumer Confidence this week dropped to its lowest level on record
  • January Building Approvals saw a substantial monthly pullback that took annual approvals -15%. Apartment approvals dropped to their lowest monthly figure since 2013.
  • February Australian Industry Group data on the Construction industry remain significantly in contraction
  • Q4 GDP posted an annual rate of 2.2%, marginally ahead of expectations


Observations from the past week

High Yield Credit Spreads blow out

Alongside the sell-off in global equity indices, corporate credit markets similarly saw investors seeking to de-risk portfolios.

The chart below shows the average spread above swap rates on US High Yield bonds which this month has blown out from 300bp over to 642bp over currently, but remains below the levels achieved during the European debt crisis in 2011 and an eerily similar sell-off in 2015 when oil prices collapsed and led to fears of defaults from highly indebted oil exploration companies.

Source – Bloomberg


Looking ahead




AU NAB Business Confidence (Feb), US NFIB Small Business Confidence (Feb)


AU Westpac Confidence (Mar),


US Bloomberg Weekly Confidence


US Michigan Consumer Sentiment (Mar)



For more information on the above please contact your Partners Wealth Group advisor directly or on 1800 333 143.

This information is general in nature and is provided by Partners Wealth Group. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

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