Economic and market news
Economic news this week has been focused on speculation about the contents of the Federal Budget. The usual early releases of information indicate that there will be a further shift towards ‘big government’ and interventionist policies. These policies will mean increased spending. It was reported on Tuesday that there will be a surplus of $9.3 billion for this financial year, after which the bottom line will plunge into successive deficits.
It has also been flagged that the predications in the Budget for inflation are considerably more optimistic than the independent central bank’s – it is reported that the Federal Treasury’s forecasts show inflation returning to the target band of 2-3 per cent by the end of this year, a year sooner than the Reserve Bank of Australia expects. These forecasts also contrast strongly with the analysis done by commentators and economists, which suggests that the measures in the budget are likely to boost consumption and thus inflation.
In overseas news, the Bank of England left its benchmark interest rate unchanged. However, comments by the Governor after the decision were taken as a strong signal that the first interest rate cut could come at the June meeting. The Governor was reported to have said that he is ‘encouraged’ by news on inflation and that it is likely to fall back close to the target band in the next couple of months.
Australian indices
ASX 200: Fell 0.85 per cent over the week to close at 7726.8 points on Tuesday.
All Ordinaries: Fell 0.87 per cent in the period, closing at 7995.7 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
|
100.43 |
4.01% |
-1 |
+12 |
+85 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
3.25 |
96.64 |
4.00% |
-1 |
+10 |
+95 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.75 |
95.35 |
4.32% |
0 |
+6 |
+101 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
86.14 |
4.52% |
0 |
+6 |
+82 |
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) |
3.85 |
Currencies (source:RBA)
As at the close on 14 May the AUD/USD was unchanged over the week, closing at 0.6600 on Tuesday. The AUD/RMB was up 0.28 per cent, in the period, closing at 4.7769 on Tuesday.
Venture Capital
ENA Respiratory
Stoic investee ENA Respiratory shared that it has received a notice of allowance from the US Patent and Trademark Office covering claims for its lead program, INNA-051 and its composition.
Kinoxis
Stoic investee Kinoxis announced a partnership with the National Institute on Alcohol Abuse and Alcoholism (NIAAA) to evaluate lead compound KNX100 under an executed Clinical Trial Agreement. The collaboration between Kinoxis and the NIAAA marks a significant advancement in the progression of KNX100 for the treatment of alcohol use disorder.
Property
In property news this week, auction clearance rates were reported to have dropped to 72.6 per cent, the lowest rate since Easter (early April). Within this, Sydney’s preliminary clearance rate fell from 78.1 per cent last week to 75.9 per cent and Melbourne’s preliminary clearance rate fell by three percentage points to 68 per cent.
