Economic and market news
New data show that the Australian economy slowed more than expected in the first quarter of 2023, to 0.2 per cent. This was attributed to higher interest rates weighing on household spending, and construction activity. This figure took annual growth down to 2.3 per cent, from 2.7 per cent. The economic growth outturn raised expectations of the peak in official interest rates to 4.85 per cent (currently 4.1 per cent).
Consumer and business sentiment remained weak in May. Consumer sentiment was said to be stuck at recessionary levels and businesses are increasingly pessimistic about the economy. Westpac’s consumer sentiment survey headline measure is 22 per cent below its long-run average. Meanwhile, measures of business conditions and forward orders from business customers continued their sustained decline, indicating the pipeline of future economic activity is shrinking in response to the fastest interest rate tightening cycle in a generation.
Alongside these new data, the Reserve Bank of Australia’s Governor gave a speech in which he warned that bringing down inflation would involve a few years of relatively weak growth. He also highlighted that the main upside risk to the outlook for inflation and interest rates was the growing mismatch between nominal wages, which increased by 3.7 per cent over the past year, and productivity, which is falling at its fastest pace on record.
Australian indices
ASX 200: Rose very slightly over the week, 0.13 per cent, to close at 7138.9 points on Tuesday.
All Ordinaries: Also rose 0.13 per cent, in the week, closing at 7329.1 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 |
3.25
|
98.64 |
4.01% |
+2 |
+85 |
+127 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.25 |
93.11 |
3.79% |
+0 |
+73 |
+44 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
4.50 |
104.61 |
3.93% |
-2 |
+61 |
+26 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
89.12 |
4.18% |
-2 |
+48 |
+34 |
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) |
|
4.10 |
+0.25 (6 June 2023) |
+0.25 (6 June 2023) |
0.85 |
Currencies(source:RBA)
As at the close on 13 June, the AUD/USD had risen 1.50 per cent in the week, to 0.6761. The AUD/RMB had risen 2.25 per cent in the period, to 4.8441.
Commodities
Oil prices increased this week after OPEC announced that it will cut an extra 1 million barrels a day from its supply from July, taking its production to the lowest level for several years.
Venture Capital
Jayride
Stoic investee Jayride announced that it is now supporting Spanish-language customers. Another step closer to catering all the world's travellers!
Kinoxis
Stoic investee Kinoxis has announced that it has been awarded US$3.6 million in funding from the United States’ National Institute on Drug Abuse to further develop KNX100, its lead molecule targeted at treating the symptoms of opioid withdrawal.
Morse Micro
Stoic investee Morse Micro announced that it will power the first globally available Wi-Fi CERTIFIED HaLow IoT gateway, developed by AsiaRF.
Property
New data werereported to show that growth in unit values jumped higher than that of houses across 39 per cent of all suburbs nationwide over the past three months, as demand shifted towards the affordable segment of the market in response to increases in interest rates and the cost of living.
