In this video, Shane Oliver, Chief Economist and Head of Investment Strategy at AMP Capital, provides commentary on the low oil prices, inflation rates and the expected year-end rally in markets.

Low oil prices benefit consumers

Increased oil supplies coming from Saudi Arabia and the US – during a time of constrained global growth and oil demand – are seeing oil prices run around half their levels of mid last year. The added boost to low inflation, periodic deflation fears and low interest rates have mixed implications for investors. However, low oil prices are a good news for net oil importing countries – particularly the US, Europe and Japan - and consumers generally as low petrol and energy prices flow through.

Low inflation figures for September

September’s low inflation figures along with de facto monetary tightening by the big four banks – where lending rates for both investors and owner-occupiers were raised – have put pressure on the RBA to further reduce interest rates that is likely to continue into next year.

Equity markets rally

October is often the turning point from a period of weakness in equity markets and so far so good with October seeing strong gains in share markets. We’re looking at a further rally in markets going forward as the cyclical bull market in shares continues, but there could be short-term pause in November ahead of year end seasonal strength.

Shane Oliver

Shane Oliver joined AMP in 1984, becoming Chief Economist in 1994 and is now Chief Economist and Head of Investment Strategy. He has extensive experience analysing economic and investment cycles and what current positioning means for the return potential for different asset classes such as shares, bonds, property and infrastructure.
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