Investment market update
At a glance
- Australian and international sharemarkets lower
- Commodity prices continue to fall
- Global bond yields rise
- Australian dollar extends its slide against the US dollar
- Reserve Bank of Australian keeps interest rates on hold
Australian shares fall
The Australian share market fell in June, with the S&P/ASX 200 Accumulation Index closing the period 2.3% lower. Contributing to this decline was news that Australia’s economy expanded by less than expected in the first three months of 2013 and concerns that the world’s central banks will curb their economic stimulus efforts.
Global sharemarkets weaker
Global sharemarkets weakened in June amid early fears that improving economic data in the United States would prompt the US Federal Reserve to start unwinding its ‘quantitative easing’ program, effectively signalling the end of the ‘easy money’ that has helped underpin much of the market’s gains over the past year or so.
However, some suggestion that current stimulus measures would not be withdrawn completely but eased back over time, and a downward revision to US first quarter growth figures, sparked a strong rally that helped reduce some of the month’s earlier losses.
Collectively, global sharemarkets ended the month down 2.6%.^
Domestic interest rates kept on hold
The Reserve Bank of Australia (RBA) left interest rates unchanged at 2.75% in its June and July meetings. Overall, though, little has changed for the RBA since it lowered interest rates in early May, with some scope therefore remaining to cut interest rates further should the domestic growth outlook deteriorate.
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