The Pulse
- Australia’s S&P/ASX 200 Index finished June materially lower ending -8.8%. All sectors with the exception of Consumer Staples were negative.
- The US Federal Reserve has raised rates by 0.75%, in response to the high inflation rate.
- Annual inflation rose to 8.8% in the Euro zone, strengthening the case for the ECB to raise interest rates.
- The RBA raised the cash rate to 0.85% in June, in an attempt to bring inflation under control.
Global economies
New variants have caused global Covid-19 cases to rise, surpassing 548.5 million cases and 12 billion vaccine doses administered as at the end of June. Inflation, especially rising energy and food costs, continues to be a global issue spiking in most economies.
US
Fed Chair Jerome Powell reiterated the commitment to do-whatever-it-takes to control high inflation.
Europe
In the UK, the Bank of England increased the cash rate by 25bps to 1.25% in June.
China
CPI came in at -0.2% in May, with the annual rate flat at 2.1%, below the expected 2.3%.
Asia Region
As widely expected, the Bank of Japan left its key short-term interest rate unchanged at -0.1% and that for 10-year bond yields around 0% during its June meeting.
Australia
The RBA raised rates by 50 bps in June, bringing the cash rate to 0.85%. The unemployment rate remained at 3.9% in May, above expectations of 3.8%.
DISCLAIMER
The information in this Market Update is current as at 17/7/2022 and is prepared by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421445 on behalf of IOOF Holdings Ltd and its subsidiaries. Any advice in this Market Update has been prepared without taking account of your objectives, financial situation or needs. Before making any decisions based on the content of this document, the reader must consider whether it is personally appropriate in light of his or her financial circumstances or should seek independent financial advice on its appropriateness. Past performance is not a reliable indicator of future performance. Before acquiring a financial product, you should obtain and read the corresponding Product Disclosure Statement (PDS) and consider the contents of the PDS before making a decision about whether to acquire the product.