January 2015 Investment Market Report

Economic & Investment Commentary for quarter ended 31 December 2014

Economic conditions and investment markets were mixed over the December quarter with sharply falling oil prices, lower global bond yields and the strengthening U.S. dollar dominant influences on investor sentiment.

In the United States, economic growth was strong, underpinned by a steady improvement in consumer spending. Employment growth for the year was the highest since 1999, with the United States finally recouping the job losses of the recession. U.S. corporate profits and earnings performance also remained encouraging with a positive surprise bias throughout the year.

In Europe, economic conditions continued to be sluggish with growth slowing in the major Eurozone economies and inflation falling. This raised fears of deflation and prompted calls for some form of quantitative easing. In December, Greece once again stoked fears of an exit from the euro currency union, as its ruling coalition failed to secure majority support for its President elect, triggering fresh elections.

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PSA Jan 2015 Economic Commentary Final

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