Monthly Market Snapshot - February 2022 - The Monthly Market Snapshot publication provides commentary on the global economy and the performance of ...
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Monthly Market
Snapshot
February 2022
The Monthly Market Snapshot publication provides
commentary on the global economy and the
performance of financial markets
Market commentary
In February, the major crisis of Russia invading Headline inflation within Europe is also at a high
Ukraine led to a variety of sanctions imposed on level, with a large part coming from energy
Russian exports and assets, and a collapse in the inflation. While the ECB is not ruling out a rate hike
price of Russian equities, bonds and the ruble over the year, the meeting during the month
currency. The corresponding increase in risk suggested a gradual approach would be
aversion led to a decrease in the performance of undertaken. While economic indicators were
global equities. generally positive, concerns around the disruption
of Russian commodity exports, and its significant
The invasion of Ukraine contributed to a spike in impact on Europe, led to the decline in European
commodity prices, including oil, as Russia is a key markets over the month.
producer of oil and gas. Russia and Ukraine are
also significant exporters of agricultural products, Bond yields rose in the month, particularly
such as wheat and corn. Furthermore, the Australian government bond yields, which resulted
uncertainty led to an increase in the perceived safe in the negative performance of bond indices.
haven asset, gold, and an increase in the volatility Inflation remains a key focus of central banks and
index, VIX. markets continue to expect rates to be increased
during the year. The latest commentary from the
The Australian market was one of the few that RBA, amidst the announcement of its decision to
posted positive performance, with the resources leave the official interest rate target on hold at
sector being the major contributor, supported by 0.10%, was that it was prepared to be patient when
the rise in commodities prices. In addition, the it comes to raising interest rates.
financials sector also contributed to positive
performance in the month. The Australian dollar outperformed against the
major currencies over the month given the strong
Economic indicators within the US were generally prices exhibited by Australia’s major export
positive with the service and business PMIs commodities.
exhibiting an increase from prior months.
Furthermore, employment and wages data also Australian listed real assets outperformed
recorded an increase. With high inflation and international listed real assets, in line with broader
strong employment, the expectation of the market equity markets, despite bond yields rising relatively
is still for the US Fed to follow through on rate more in Australia during the month.
hikes over the course of the year. Nevertheless,
investor concerns over the Russia-Ukraine
situation, and tighter monetary policy, saw the
decline in the US equity market.
February Monthly Market Snapshot 1
© Frontier AdvisorsFebruary 2022
Australian equities Fixed income
International equities ($A) Australian dollar
International equities Real assets
Details of the indices are in the table on the next page
February Monthly Market Snapshot 2
© Frontier AdvisorsFebruary 2022
*Price Index
February Monthly Market Snapshot 3
© Frontier AdvisorsAsset class yields relative to history
February Monthly Market Snapshot 4
© Frontier AdvisorsAsset class long-term returns
February Monthly Market Snapshot 5
© Frontier AdvisorsAsset class long-term returns
February Monthly Market Snapshot 6
© Frontier AdvisorsFrontier Level 17, 130 Lonsdale Street
Melbourne, Victoria 3000
Tel: +61 3 8648 4300
www.frontieradvisors.com.au
@frontier_adv
Frontier does not warrant the accuracy of any information or projections in this paper and does not undertake to
publish any new information that may become available. While this information is believed to be reliable, no
responsibility for errors or omissions is accepted by Frontier or any director or employee of the company.
The advice in this paper does not take into account investors’ particular objectives, financial situation or needs.
Investors should consider the appropriateness of the contents of this paper in light of these matters and seek
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