RI Advice Monthly Market Update – February 2022

Last week a bill implementing a number of changes to superannuation legislation passed Parliament.

These beneficial changes may create further planning opportunities from 1 July 2022. The most relevant changes are:

• Changing super contribution work test requirements from age 67 to 74

• Increasing access to super contribution bring-forward rule from 67 to 74

• Lowering home downsizer super contribution eligibility age from 65 to 60

• Increasing maximum release amount under First Home Super Saver (FHSS) Scheme from $30,000 to $50,000 (plus associated earnings).

As part of our ongoing service we will be reviewing how these changes may impact your position and whether any beneficial financial planning opportunities will arise.

Global shares fell 2.2% and 5.1% in unhedged and hedged terms, respectively. Global emerging markets rose 1.2% over the month.

Australian shares performed poorly during January, with the S&P/ASX 200 losing 6.4%. The leading sectors were Energy (up 7.88%) and Utilities (up 2.56%). I.T. was again the worst

performing sector for the month (down 18.43%).

Fixed income returns for the month were very poor, returning -1.0% domestically and -1.6% globally.

The Australian dollar (AUD) lost 2.70% against the US dollar and 2.76% against the Yen. Note by mid-February, the AUD is back up trading around 0.7185 USD.

Globally

U.S inflation is still red hot. The consumer price index rose 0.6% for the month of January, 7.5% on a year-on-year basis, and was the fastest rate since February 1982.

Minutes of the January 25-26 Federal Open Market Committee meeting stated, “that if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation at a faster pace than they currently anticipate”.

China’s inflationary pressure continued to ease in January, with the growth of both consumer and factory-gate prices slowing further.

Locally

Australia’s Consumer Price Index rose 1.3% in the December quarter, bringing inflation for the full 2021 year to 3.5%.

This is above the Reserve Bank of Australia’s medium-term target range of 2-3% inflation. It will excite speculation about the central bank lifting interest rates far sooner than expected.

As expected, at the RBA’s February Board meeting, a decision was made to end QE.

The official cash rate remained at 0.10%, but the futures market is pricing in 4 rate rises this year.

RI Advice Sutherland

Suite 5 level 5/3-5 Stapleton Ave, Sutherland NSW 2232

risutherland.com

The information above, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs.

Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.

RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429.