Economic and market news
In Australia this week, the media was focused on the climate change debate and the opposition party’s pro-nuclear policy announcements. This emotive debate also included considerable discussion about the impact this change in political tack might have on investor and market certainty about the path to net zero here, and the need for renewable energy infrastructure.
In economic news, analysis shows that households saved just 0.9 per cent of their disposable incomes in the three months to end-March, which is about 5.8 percentage points below the pre-pandemic average. This level of saving is much lower than global peers, and it is suggested that this is because we are experiencing a decline in disposable incomes because of higher mortgage repayments (in our variable rate dominant market) and tax bracket creep. As such, it was mooted that the extra income resulting from the July 1 tax cuts could be spent rather than saved and keep upward pressure on inflation, delaying interest rate cuts or even forcing another rate rise by the Reserve Bank of Australia.
In overseas news, the Bank of England held its interest rate at 5.25 per cent, despite a inflation falling to the target rate of 2 per cent in May.
Australian indices
ASX 200: Rose a further 0.78 per cent over the week to close at 7838.8 points on Tuesday.
All Ordinaries: Rose 0.76 per cent in the period, closing at 8076.7 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
|
100.39 |
4.01% |
-1 |
-2 |
-18 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
3.25 |
97.02 |
3.93% |
-2 |
-7 |
0 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.75 |
96.38 |
4.20% |
-2 |
-11 |
+21 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.46 |
4.39% |
-2 |
-11 |
+20 |
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 25 June the AUD/USD had risen 0.57 per cent over the week, closing at 0.6664 on Tuesday. The AUD/RMB also rose, 0.65 per cent, in the period, closing at 4.8388 on Tuesday.
Venture Capital
New data show that there are early signs of a rebound in the Australian startup funding market.
The figures suggest that the ‘tech funding winter’ is thawing, with the amount of capital raised by Australian startups this year 30 per cent up on the same period last year.
Local start-ups raised $1.7 billion in the first five months of 2024, outpacing the $1.3 billion banked in the same period last year. However, it was suggested that there is still a way to before the market is out of the woods, as the amount is less than half of the $4.1 billion raised in the corresponding period in 2022, the peak of the pandemic-era tech boom. The number of deals declined also to 144 during the period to May 31, compared with 151 and 243 in the corresponding periods in 2023 and 2022.
BioScout
Stoic investee BioScout shared more about its pioneering automated airborne disease tracking system, and how it helps farmers to optimise fungicide timing so as to enhance crop protection, environmental sustainability, and resistance management.
Property
In property news this week, new data show that last week’s rebound in the clearance rate could have just been a market catch up. Nationally, the clearance rate slipped down to 72.4 per cent, from 72.9 per cent the week before. This was driven by a sharp fall in Sydney’s performance. Economists suggested this could point to a potential moderation in price growth in Australia’s most expensive housing market amid fears that the Reserve Bank of Australia could lift interest rates before the end of the year to suppress ‘sticky’ inflation.
