Economic and market news
On Tuesday, the Reserve Bank of Australia decided to leave its official policy rate unchanged at 4.10 per cent. The decision, was the third consecutive no change, and was widely anticipated.
Commentary focused on warnings in the Governor’s statement about the deteriorating Chinese economy. It was suggested that the decline is now a significant risk to the local economic outlook. The persistence of high inflation and how well households cope with the rapid increase in mortgage costs over the past year were also highlighted as issues the RBA is watching. Economic growth data due to be published on Wednesday are expected to show a further slowdown in the Australian economy during the June quarter.
New data show that inflation cooled in July, with the annual figure now 4.9 per cent, down from 5.4 per cent for the year to end June. The softening in price pressures was attributed to falling consumer demand for food and non-essential goods.
Similarly, in the United States, new data show that inflation remained low in July. The annual figure ticked up slightly to 3.3 per cent, from 3 per cent in June. This was said to be the latest data to suggest the economy and the jobs market may be slowing enough to cool inflation pressures.
Australian indices
ASX 200: Rose again this week, by 1.44 per cent, to close at 7314.3 points on Tuesday.
All Ordinaries: Also rose, 1.35 per cent, closing at 7516.8 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 |
0.25
|
92.49 |
3.83% |
0 |
-8 |
+81 |
|
GTAUD5Y:GOV Australia Bond 5 Year Yield |
2.75 |
94.79 |
3.86% |
+2 |
-6 |
+51 |
|
GTAUD10Y:GOV Australia Bond 10 Year Yield |
3.00 |
90.63 |
4.13% |
+4 |
-6 |
+49 |
|
GTAUD15Y:GOV Australia Bond 15 Year Yield |
3.25 |
87.14 |
4.38% |
+4 |
-4 |
+52 |
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) |
|
4.10 |
No change (5 September 2023) |
+0.25 (6 June 2023) |
2.35 |
Currencies (source:RBA)
As at the close on 5 September, the AUD/USD had fallen slightly this week, 0.71 per cent, to 0.6401. The AUD/RMB also rose, 0.65 per cent in the period, closing at 4.6681 on Tuesday.
Venture Capital
ENA Respiratory
Stoic investee ENA Respiratory announced that it has signed a US$3.8M contract extension with the United States Department of Defenseto fund its non-clinical safety work supporting a seasonal prophylaxis Phase 2b study.
Property
It was reported that Real Estate Investment Trusts have taken a$6 billion hit to portfolio valuations in the 2023 financial year. This is thanks to fears that office values could creep even lower as landlords absorb steeper debt costs and higher investment yields.
It was reported that residential house prices are continuing to ‘firm’.New data show that Sydney house prices accelerated again in August, increasing 1.1 per cent over the month, compared with 0.9 per cent in July. Home values also re-accelerated in Melbourne, Brisbane and Canberra. However, price growth slowed in Perth and Hobart. The numbers led commentators to suggest that the housing market has moved through its downturn phase and the recovery has spread out and become established.
