Economic and market news
In Australian economic news this week, the Reserve Bank of Australia decided to leave the official interest rate unchanged at 4.35 per cent. The statement accompanying the announcement indicated that RBA board is increasingly alert to upside risks to the outlook for inflation, after the economy recorded stronger-than-expected price pressures and household spending figures over the past month, and the labour market remained string.
In the Governor’s media conference she suggested that the June quarter consumer price index (released on 31 July) will determine whether the uptick in inflation in April was a true reflection of inflationary pressures. Commentators took that to mean that the August Board meeting could see a possible tightening of monetary policy. She also revealed that there had been discussion about a possible rise in interest rates, but no consideration of a cut, at Tuesday’s meeting.
Alongside this, new data show that unemployment in Australia fell back to 4 per cent in May from 4.1 per cent in April. This was thanks to employment rising by around 40,000 people and the number of unemployed falling by 9,000 people.
It was also noted that while there has been an increase in unemployment on average in recent months, there are still nearly 110,000 fewer people unemployed than in March 2020, just before the pandemic.
In overseas news, the United States central bank kept official interest rates on hold at its June meeting, and signalled that there may now only be one cut in 2024. Alongside this, inflation data revealed price pressures were weaker in May than expected. CPI inflation was zero in the month and 3.3 per cent for the year to end-May down from 3.4 per cent in April. Core inflation was just 0.2 per cent in the month and 3.4 per cent in the 12 month period, down from 3.6 per cent in April. The combination of these factors helped tip the S&P 500 index over 5400 points for the first time ever.
In the United Kingdom, gross domestic product was flat in April compared with the previous month, a slowdown from 0.4 per cent growth in March. This further slowdown raised concerns that the economy’s rebound from last year’s recession is losing momentum.
Australian indices
ASX 200: Rose 0.29 per cent over the week to close at 7778.1 points on Tuesday.
All Ordinaries: Rose 0.12 per cent in the period, closing at 8015.8 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
|
100.54 |
3.93% |
+6 |
+4 |
-25 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
3.25 |
97.23 |
3.88% |
+5 |
-1 |
-6 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.75 |
96.74 |
4.15% |
+4 |
-6 |
+13 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.93 |
4.34% |
+4 |
-6 |
+8 |
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 18 June the AUD/USD had risen 0.36 per cent over the week, closing at 0.6626 on Tuesday. The AUD/RMB also rose, 0.40 per cent, in the period, closing at 4.8077 on Tuesday.
Venture Capital
BioScout
Stoic investee BioScout made the exciting announcement that its airborne fungal pathogen surveillance network is now live!
In collaboration with the Grains Research and Development Corporation, it has deployed 60 SporeScout units across Australia's key wheat belts. Leveraging automated microscopy and machine learning, this initiative marks a significant step forward in disease management.
BioScout said that real-time data from this network is already empowering growers and researchers with precise insights to combat fungal diseases more effectively.
Morse Micro
Stoic investee Morse Micro was featured in AgriTechTomorrow.com discussing how it has teamed up with Zetfi to provide farmers with reliable, high-speed wireless connectivity across their expansive operations. It said this will enhance efficiency, productivity, and sustainability across the agricultural sector. Sensors powered by Wi-Fi HaLow can provide farmers and ranchers with real-time insights into their operations, enabling more efficient resource allocation and maximizing yields.
Property
In property news this week, it was reported that auction clearance rates rebounded after the long weekend lull. The national rate picked up to 72.9 per cent from 67.3 per cent the week before. This was said to be in the strongest national result since the first week of May.
Meanwhile, it was suggested that there could be a surge in building inflation again thanks to rising wages in the construction sector, increased demand for materials.
