Major global equity markets were mixed for the month of June. Shares listed in the United States (US) continued to produce strong returns with investors hoping that cooling inflation will prompt the Federal Reserve to start cutting interest rates. The value of the Australian Dollar (AUD) rose against most major foreign currencies, decreasing overseas investment returns when measured in Australian dollar terms. Australian and international fixed interest markets posted positive returns.

Global inflation has been falling towards central banks’ targets in some advanced economies whilst rising in others. Reported data for May, released in June, showed that year-on-year Consumer Price Inflation (CPI) fell in the United States to 3.3% year on year in May, down 0.1% from the previous month. The United Kingdom’s CPI, including Owner Occupier’s Housing Costs, fell to 2.8% in May, down 0.2% from the previous month. Notably however, recent data released by the Australia Bureau of Statistics shows Australia’s inflation remains sticky. Australia’s year on year CPI indicator rose by 4%, an increase of 0.4% from the previous month. The most significant price rises were Housing (+5.2%), Food and non-alcoholic beverages (+3.3%), Transport (+4.9%) and Alcohol and tobacco (+6.7%). The Euro Area also saw an increase in their Index of Consumer Prices with a rise of 2.6% year on year in May, up 0.2% from the previous month.

The Board of the Reserve Bank of Australia (RBA) met on 18 June and voted to leave the cash rate target unchanged at 4.35% for the sixth consecutive month. In a media release the RBA stated: “The central forecasts published in May were for inflation to return to the target range of 2–3 per cent in the second half of 2025 and to the midpoint in 2026. Since then, there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth. At the same time, the revisions to consumption and the saving rate and the persistence of inflation suggest that risks to the upside remain.”

In the United States, the presidential race continued to heat up as candidates ramped up their campaigns ahead of the general election. President Joe Biden focused on his economic achievements and the country's recovery post-pandemic, emphasising job growth and infrastructure development. Republican candidate former President Donald Trump remained a dominant figure, with frequent rally appearances and strong media presence, despite legal challenges. On 28 June (Australian time), both candidates squared off in the first presidential debate where key issues like immigration, healthcare, climate change and foreign policy were addressed. 

Equities

Major developed foreign equity markets were mixed in June with developed markets (excluding Australia) returning 2.3% on a local currency basis (and 1.6% in Australian Dollars reflecting the rise in the Australian Dollar). The best performing major foreign equity market was the United States S&P 500 returning 3.6% (in local currency terms) in June, whilst the worst performing major foreign equity market was the Europe STOXX 50 which returned -1.7%.

The Australian stock market (S&P/ASX 200 Index) returned 1.0% for the month, with seven industry sectors experiencing positive returns and four industry sectors experiencing negative returns. Financials, Consumer Staples and Healthcare were the standout performing sectors, returning 5.1%, 4.6% and 4.3% respectively. The weakest performing sector was Materials, returning -6.5%.

In overseas developed share markets, five sectors produced positive returns for the month, with six sectors producing negative returns. The best performers were Information Technology and Communication Services, returning 8.9% and 4.3% respectively. The worst performing sector was Utilities, returning -4.5%.

Bonds

Currencies

Commodities