Key Points:
- The RBA cut the overnight cash rate to 1.75% from 2.00% at the May board meeting but held firm at the June meeting.
- In fixed income, the 3 Month Bank Bill Swap Rate fell by -0.10%, while the 10 Year Australian Bond Yield fell by 0.20% in May.
- Corporate debt spreads, as measured by the iTraxx Australian Index, fell to 126.09 over the month from the previous reading of 131.76.
- Australian shares rose further over the month, with the All Ordinaries Index and the S&P/ASX 200 Index increasing by 2.48% and 2.41%, respectively.
- Domestic listed property followed the broader market gain, returning 2.68% over the month.
- Regional equity markets ended higher in most regions, with the TOPIX (Japan) Index gaining 2.93% to be the best performer, and the Hang Seng (Hong Kong) Index declining by -1.20% to be the worst performer.
- Global commodity prices ended the month lower, losing -1.30%, as measured by the US$ CRB Spot Commodity Index. Gold and Iron Ore prices were sharply lower, declining -6.04% and -20.93%, respectively, in US Dollar terms.
- The Australian Dollar fell heavily against most currencies in May, falling by -5.40% against the US Dollar, -3.20% against the Euro, -5.57% versus the British Pound and -1.90% against the Japanese Yen.
- The Australian Trade Weighted Index (TWI) fell by -3.29% over the month, ending April at 61.70.
- Share market volatility fell both domestically (-1.51%) and in the US (-1.23%).
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Source: Zenith Investment Partners
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