Markets summary - July 2023

Investment markets were up in July, buoyed by US headline CPI inflation plunging to a two-year low of 3% for the 12 months to June. Notwithstanding the welcome fall in inflation, the US Federal Reserve raised interest rates in July by 25bps to a range of 5.25-5.50% and the European Central Bank raised rates by 25bp to 3.75%, the highest level since the year 2000. The Reserve Bank of Australian kept rates unchanged in July.

 

Australian Equities gained 2.9% led by the energy sector that was up 8.8%, with the Healthcare and Consumer Staples sectors the only detractors for the month. Currency-hedged international equities returned 2.8%, aided by robust returns from US, Asian and European equities. Unhedged international equities gained 2.1%, blunted by the Australian dollar which was slightly up (+0.8%) against the US dollar buying US$0.6717 at the end of the month.

 

The Australian 10-year government bond yield rose by 4bps to 4.06% and the 2-year government bond yield fell by 28bps to 3.94%. The US 10-year government bond yield rose by 12bps to close at 3.96% and the US 2-year government bond yield fell by 2bps to 4.88%.

 

DISCLIAMER

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.