Economic and market news
The Reserve Bank of Australia raised the official interest rate again on Tuesday, by 0.25 percentage points, to 3.85 per cent. The cumulative 375 basis points of increase since May 2022 is the most rapid monetary policy tightening cycle in a generation.
The Governor’s statement after the decision stressed that although inflation has moderated to 7 per cent, it is still too high to be comfortable that it is on track to return to target in a ‘reasonable timeframe’. He noted particularly that services price inflation is still very high and broadly based, and that labour costs are also rising ‘briskly’.
The decision to raise the rate for the 11th time came as a shock, with very few commentators forecasting the move, and markets pricing in almost no chance of a change.
In overseas news, new data show that the US economy is stuck in a ‘stagflation’ trap of decelerating growth and sticky inflation. Economic growth for the first quarter was reported to have been 1.1 per cent, significantly lower than market expectations. Meanwhile, core inflation in the period has accelerated to the highest rate in a year.
Australian indices
ASX 200: Fell again, 0.67 per cent, this week, to close at 7270.9 points on Tuesday.
All Ordinaries: Also fell, 0.57 per cent in the week, closing at 7459.8 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 |
3.25
|
99.98 |
3.25% |
+21 |
+32 |
+71 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.25 |
95.46 |
3.22% |
+14 |
+20 |
+22 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
4.50 |
108.84 |
3.44% |
+9 |
+15 |
+18 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
93.50 |
3.77% |
+8 |
+14 |
+37 |
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 2 May, the AUD/USD had risen 1.45 per cent in the week, to 0.6705. The AUD/RMB also rose, 1.33 per cent, in the period, to 4.6349.
Venture Capital
Cardihab
The CEO of Stoic investee Cardihab, Helen Souris, spoke to the Australian Broadcasting Corporation about the power of Digital Cardiac Rehabilitation. In particular, she discussed how it can help overcome the common barriers faced by the 80 per cent of eligible patients that don't participate in cardiac rehabilitation.
Forcite
The co-founders of Stoic investee Forcite, Alfred Boyadgis and Julian Chow, this week spoke to ‘Stories behind the Products’ about the Forcite smart helmet journey.
Jayride
The CEO of Stoic investee Jayride, Rod Bishop, spoke to Stockhead about his expectation that it will meet the 1 million passengers milestone this year, off the back of a global travel record this July.
Morse Micro
Michael De Nil, CEO of Stoic investee Morse Micro, talks in Forbes Magazine about how consumers are continuing to add more connected devices to their homes, and how Wi-Fi HaLow is poised to make it much easier for consumers to manage their smart home networks.
Property
Housing market commentators were said to be revising their forecasts off the back of recent data from Corelogic that shows price growth. Expectations had been for further falls in the market, as the full impact of the significant interest rate rises is felt. However, the surge in immigration, supply chain issues in the construction sector, increased demand as the rental market tightens, and a low volume of properties for sale, are all seen as contributing to a sooner-than-expected turnaround.
