Geopolitics took centre-stage as Israeli jets, drones and missiles attacked Iranian nuclear reactors, air defences, military personnel and other military assets. Iran responded with a barrage of missile attacks, including hypersonic missiles which were unable to be intercepted by Israel’s “iron dome” defence system. On the 21st of June, US President Donald Trump announced that a squad of US B2 jets and naval ships destroyed several Iranian nuclear targets, including the “Fordow” nuclear facility buried deep inside a mountain using sophisticated “bunker buster” munitions. Iran responded with an attack on a US base in the Middle East before all parties agreed on a ceasefire. The fighting initially caused a surge in crude oil prices, followed by a material decline.
President Donald Trump publicly lambasted Federal Reserve Chairman Jerome Powell for his refusal to lower the Federal Funds Rate. Earlier in the month, the relationship between President Trump and Elon Musk came under strain as Elon Musk criticised President Trump’s “Big Beautiful Bill” following his departure from the Department of Government Efficiency (DOGE) - urging senators to vote against the legislation amid concern about increased debt and deficits and the US $5 trillion increase in the “debt ceiling” measure. Protests against deportation of illegal immigrants turned violent in California, culminating in President Trump dispatching the US National Guard to help quash the unrest despite California Governor Gavin Newsom’s plea for no such intervention.
Locally, Australia’s economy grew by 0.2% in the March quarter, lower than expected and GDP per capita turned negative once again. Inflation eased further with Australia’s CPI rising 2.1% for the year to May, down from 2.4% in the prior month and the “trimmed mean” print was the lowest since late 2021. By month end, the ASX300 Accumulation Index gained 1.4% and A-REITs gained 1.7%. Global share markets returned 3.8% and currency-unhedged investors returned 2.5%, hindered by the AUD which gained against the US dollar and Japanese Yen. The Australian 10-year government bond yield declined by -0.10% to 4.16% and the US 10-year government bond yield fell -0.17% to 4.23% at month end.
Author: Allan Grant - Senior Portfolio Analyst
President Donald Trump publicly lambasted Federal Reserve Chairman Jerome Powell for his refusal to lower the Federal Funds Rate. Earlier in the month, the relationship between President Trump and Elon Musk came under strain as Elon Musk criticised President Trump’s “Big Beautiful Bill” following his departure from the Department of Government Efficiency (DOGE) - urging senators to vote against the legislation amid concern about increased debt and deficits and the US $5 trillion increase in the “debt ceiling” measure. Protests against deportation of illegal immigrants turned violent in California, culminating in President Trump dispatching the US National Guard to help quash the unrest despite California Governor Gavin Newsom’s plea for no such intervention.
Locally, Australia’s economy grew by 0.2% in the March quarter, lower than expected and GDP per capita turned negative once again. Inflation eased further with Australia’s CPI rising 2.1% for the year to May, down from 2.4% in the prior month and the “trimmed mean” print was the lowest since late 2021. By month end, the ASX300 Accumulation Index gained 1.4% and A-REITs gained 1.7%. Global share markets returned 3.8% and currency-unhedged investors returned 2.5%, hindered by the AUD which gained against the US dollar and Japanese Yen. The Australian 10-year government bond yield declined by -0.10% to 4.16% and the US 10-year government bond yield fell -0.17% to 4.23% at month end.
Author: Allan Grant - Senior Portfolio Analyst
Disclaimer:
The above is intended as general market commentary only and is not intended as, and does not constitute, advice of any kind. No liability is accepted for any action taken based on the above or for any loss suffered as a result of reliance on the same.
