Economic and market news
Monthly labour force figures for Australia show a slight softening in market conditions, causing an increase in unemployment to 3.7 per cent (from 3.5 per cent). The small fall in people in jobs (18,000) in April comes after unexpectedly strong average monthly increases of 39,000 in each of the first three months of the year. It was noted that employment levels remain well above pre-COVID levels. However, this did not stop commentators calling for a pause in official interest rate increases to prevent further slowing in the economy.
Alongside this, other new data show that during the March quarter wages grew at the highest rate in more than a decade. Annual wages growth hit 3.7 per cent in the first quarter of 2023, amidst ongoing tightness in the labour market. However, commentators and markets concluded that pressure on labour costs peaked at the end of last year, noting that wages increased by 0.8 per cent in the first three months of the year, weaker than the June and September quarters last year.
The Victorian Government published its budget this week, which included plans to tax business and property investors to pay down the additional debt accumulated during the COVID pandemic. The extra ‘COVID levy’ is set to last for 10 years.
Australian indices
ASX 200: Rose slightly over the week, 0.35 per cent, to close at 7259.9 points on Tuesday.
All Ordinaries: Also rose, 0.31 per cent, in the week, closing at 7447.4 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
|
99.46 |
3.54% |
+7 |
+39 |
+104 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.25 |
94.75 |
3.40% |
+7 |
+19 |
+39 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
4.50 |
106.99 |
3.65% |
+6 |
+19 |
+32 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
91.17 |
3.98% |
+6 |
+19 |
+45 |
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) |
|
3.85 |
+0.25 (2 May 2023) |
+0.25 (2 May 2023) |
0.35 |
Currencies(source:RBA)
As at the close on 23 May, the AUD/USD had fallen 1.89 per cent in the week, to 0.6650. The AUD/RMB had risen 0.91 per cent in the period, to 4.6900.
Commodities
It is being predicted that the iron ore price faces an imminent pull back. This is because steel production in China is slowing, amid concerns about economic activity and the property sector’s outlook, just as supply disruptions in the global market are resolving.
Venture Capital
Cardihab
The CEO of Stoic investee Cardihab, Helen Souris, spoke to the MTP Connect podcast about the importance of finding the right ‘acceleration program’ to maximise success.
Morse Micro
The CEO of Stoic investee Morse Micro, Michael De Nil, shared with Forbes.com how Wi-Fi HaLow is helping to overcome the range limitations of existing wireless, and opening up opportunities across industries from healthcare to manufacturing and beyond.
Property
Housing price rises have reportedly accelerated in the the past four weeks, thanks to persistently low stock and heightened demand. This has lifted values by between 0.3 and 1 percentage points nationwide, the sharpest 28-day increase since December 2021.
Alongside this, housing auction clearance rates across the six capitals this week were said by CoreLogic to have hit a 15-month high of 75.3 per cent, up from (a revised) rate of 70.7 per cent the previous week.
New property market analysis suggests that transactions in the shopping centre market are expected to pick up later this year. The research highlights that the neighbourhood shopping centre market has been busy recently, and larger subregional shopping centres are also selling. Real estate agency JLL says a sense of equilibrium is returning to the market post-COVID and new sources of capital are emerging, particularly from offshore, which is replenishing the pool of buyers chasing assets.
The Victorian state budget published this week included plans to abolish stamp duty on commercial and industrial properties, and replace it with an annual property tax. This measure follows a similar move earlier in the year in New South Wales, although in that state the change will include residential property.
