Economic and market news
In economic and market news this week, new data show that the volume of retail sales grew by 0.6 per cent in May. However, commentators highlighted that this was due to discounting ahead of the end of the financial year, as opposed to a sign of a wider pick up in consumer activity. Underlying spending has remained stagnant, with retail turnover flat in trend terms, since the start of 2023. Compared to May 2023, the trend is only up 1.5 per cent.
In light of a very mixed picture from the economic data, commentators are now conflicted about what the August monetary policy decision will be. Economists are leaning towards the Reserve Bank holding rates unless there is a significant uptick in inflation revealed in the new quarterly figures out on 31 July. However, markets are now pricing in an increasing chance of a policy tightening – they suggest that even a relatively small increase in inflation would be clear evidence that the disinflation process has stalled in 2024.
Australian indices
ASX 200: Rose 1.44 per cent over the week to close at 7829.7 points on Tuesday.
All Ordinaries: Rose 1.45 per cent in the period to close at 8075.2 points on Tuesday.
Government Bonds
Government Bond Yields (Source: Bloomberg)
|
NAME |
COUPON |
PRICE |
YIELD |
1 DAY |
1 MONTH |
1 YEAR |
|
GTAUD2Y:GOV Australia Bond 2 Year Yield |
4.25
|
100.08 |
4.19% |
-1 |
+22 |
-11 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
3.25 |
96.31 |
4.10% |
-1 |
+17 |
-8 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.75 |
95.27 |
4.34% |
-1 |
+12 |
+9 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
86.01 |
4.54% |
-2 |
+14 |
+13 |
Reserve Bank of Australia (Source:RBA)
|
RBA CASH RATE TARGET (RBATCTR:IND) CURRENT (per cent) |
MOST RECENT DECISION (percentage points) |
MOST RECENT CHANGE (percentage points) |
1 YEAR PRIOR (per cent) |
|
4.35 |
+0 (18 June 2024 ) |
+0.25 (7 November 2023) |
4.10 |
Currencies (source:RBA)
As at the close on 9 July the AUD/USD had risen 1.47 per cent over the week, closing at 0.6744 on Tuesday. The AUD/RMB had also risen, 1.49 per cent, in the period, closing at 4.9042 on Tuesday.
Venture Capital
Cut Through Ventures published its quarterly statistics on startup funding activity this week. The data show that the sectorexperienced a significant bounce back in activity in the three months to end-June, following a slow start to 2024. The period recorded the highest level of funding for startups since Q4 2022, with the resurgence of $100M+ deals pushing total funding above $1.5bn. Investor sentiment was clearly on the rise broadly, with reports of an improved funding market, higher quality deal flow, and better portfolio health. Artificial Intelligence, topped the sector deal count table for the first time.
Stoic Venture Capital
Stoic co-founder Craig Swanger talked to Art of the StartUp about what sparked his involvement in the Stoic All Stars Fund
Morse Micro
Stoic investee Morse Micro has this week been announced as one of the 10 Hottest IoT Startups of 2024 (so far) by CRN! This is the second consecutive year it has been included on the list. It was recognised for its recent collaboration with Silex Technology in developing new Wi-Fi HaLow products that extend the range of IoT devices by 10x more than traditional Wi-Fi protocols allow.
Property
In property news this week, there was a pick up in the auction clearance rate to 74.7 per cent from last week’s dip of 70 per cent. However, this was based upon a smaller number of auctions as volume fell during the school holidays.
Meanwhile, in the office property market, deal activity has picked up over the second quarter of the 2024. New information suggests that confidence that the market is close to ‘bottoming out’ after the pandemic. This has seen a 60 per cent increase in deals in the quarter compared to the same time in 2023. However, it was noted that transactions are still well below pre-pandemic levels due to drawn-out negotiations and a harder market for capital raising.
