Economic and market news
In economic news, new data show that the Australian economy grew by only 0.1 per cent in the first quarter of 2024. It grew by 1.1 per cent over the year to end March, the lowest through the year growth since December 2020.
GDP per capita fell for the fifth consecutive quarter, dropping 0.4 per cent in the three months to end-March and 1.3 per cent through the year.
Despite the deceleration in activity, commentators suggested that the growth outturn should be considered a ‘Goldilocks scenario’ for the Federal Treasurer and Reserve Bank of Australia - just warm enough to avoid recession headlines, but cool enough to help temper inflation.
It was also noted that over the past year about three-quarters of advanced economies have recorded negative growth in at least one quarter, while Australia has avoided that so far due to strong migration and faster employment growth than any major advanced economy.
In overseas news, the United States reportedly added more jobs to the economy in May than expected. New data show that there were 272,000 more Americans in jobs in May, accelerating from April. This was seen as a sign that companies are still confident enough in the economy to keep hiring, despite persistently high interest rates. It was also taken as ‘dashing hopes’ of an official interest rate cut soon.
However, there were some signs of a potential economic slowdown in the US. The unemployment rate edged up for a second straight month, from 3.9 per cent to a still-low 4 per cent. This outturn ended a 27-month streak of unemployment below 4 per cent. That streak had matched the longest such run since the late 1960s.
Meanwhile, the European Central Bank cut its official interest rate to 3.75 per cent. The ECB lowered the key deposit rate by a quarter-point, saying the inflation outlook had improved ‘markedly’.
Australian indices
ASX 200: Rose slightly, 0.24 per cent, over the week to close at 7755.4 points on Tuesday.
All Ordinaries: Rose 0.15 per cent in the period, closing at 8005.9 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
|
100.34 |
4.05% |
+7 |
+4 |
+6 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
3.25 |
96.63 |
4.02% |
+9 |
+0 |
+23 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.75 |
95.41 |
4.32% |
+10 |
+0 |
+38 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
86.31 |
4.50% |
+10 |
-1 |
+30 |
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 (7 May 2024) |
+0.25 (7 November 2023) |
4.10 |
Currencies (source:RBA)
As at the close on 11 June the AUD/USD had fallen 0.99 per cent over the week, closing at 0.6602 on Tuesday. The AUD/RMB also fell, 0.89 per cent, in the period, closing at 4.7886 on Tuesday.
Venture Capital
BioScout
In exciting news, Stoic investee BioScout has won Best in Horticulture at the Australian Agritech Association Awards.
Wildlife Drones
CEO of Stoic investee Wildlife Drones Dr Debbie Saunders talked to Serina Bird about how she embraced tech to help save endangered animals.
Property
In property news this week, it was reported that investor loans in April grew at their fastest pace since before the Reserve Bank began lifting rates in May 2022.
New home loan commitments to investors jumped 5.6 per cent from March, the fastest rate of gain since November 2021.
Meanwhile, the national auction clearance rate dipped below 70 per cent for the first time this year. Falling to 67.3 per cent (from 71.4 per cent the previous week) this weak figure was in the context of a fall in supply of properties up for sale on what was a long weekend in most states.
