• Local and global stocks largely finished flat for the week as markets recovered from falls earlier in the week.
• In local stock news, Coles Group announced March quarter sales up 3.9% to $9.3 billion, even as flooding in NSW and QLD forced the temporary closure of 130 stores.

MARKETS

• Mirvac shares rose after the builder said it had navigated challenges from Covid and wet weather to sell 2,332 residential lots during the March quarter, up from 2,282 in the same period a year ago.
• The oil price surged again this week as Russian supply concerns rose, particularly for Europe, whilst Chinese announcements of further stimulus also provided support.
• The Aussie dollar fell to a low of US70c during the week as the US dollar surged and concerns regarding Chinese economic growth put downward pressure on spot commodity prices.

ECONOMICS

• Australian headline inflation rose by a huge 2.1% in the March quarter taking the annual rate to 5.1% according to data from the ABS. Significant contributors to the quarterly print included new dwellings, fuel, and tertiary The RBA’s preferred core or underlying measure rose 1.4% in the quarter with the annual rate rising to 3.7%, above the RBA’s target 2-3% band.
• The US economy contracted at an annualised pace of 4% in the March quarter, well below forecasts for a 1.1% expansion, and following 6.9% growth in the December quarter of 2021. Exports dropped 5.9% while imports surged 17.7%. Private domestic investment slowed sharply whilst government spending continued to decline. On the positive side, consumer spending increased as did fixed investment (particularly non- residential).
• The US central bank chair reiterated a bias for aggressive rate hikes with markets now betting on 0.5% increases in May, June, and possibly July.
• The US is building more homes than it has in 16 years as supply tries to keep pace with very strong demand. Housing starts rose to an annual rate of 1.79 million in March.

POLITICS

• French President Macron won a 2nd term in the weekend’s election over rival Marine Le Pen with 57% of the vote. The win was by a smaller margin than the 2017 elections with Le Pen gaining ground and breaking through the 40% threshold which is rather unprecedented for French nationalist parties.
• The Russian foreign minister has warned that there’s serious danger of nuclear conflict just one week after he said Moscow was committed to avoiding the use of nuclear weapons. It’s either a threat to bring about an end to the current conflict swiftly or it’s a threat to ensure no other external involvement from other countries.
• Russia has cut off gas to Poland and Bulgaria after both countries refused to meet Russia’s request to pay for their supplies in Rubles. European gas prices surged by as much as 20%. Not good for broader Europe, and especially for Poland and Bulgaria given their significant reliance on Russian gas. Both countries stuck in a hard place as Western sanctions won’t let them pay for the gas in Rubles.
• Chinese President Xi continues to come under pressure to relax his Covid-zero policies which are bringing the economy to its knees. Xi said China would step up infrastructure construction in their latest pledge to bolster the economy.