Markets summary - August 2023

Equity markets were weaker in August. Investors were concerned by the combination of ratings agency Fitch downgrading US debt from AAA to AA+, softer economic data in the US and Australia, and renewed concerns about property markets in China following a reported loss of US$6.7 billion by major Chinese property developer “Country Garden”. The US Federal Reserve, European Central Bank and RBA left cash rates unchanged during the month.

Australian Equities declined -0.8% in August as the Utilities and Consumer Staples sectors slumped while the Consumer Discretionary sector saw robust gains. Currency-hedged international equities fell (-1.9%) but currency-unhedged international equities returned +1.6%, aided by the Australian dollar which tumbled (-3.5%) against the US dollar buying $0.6484 at close of the month.

The Australian 10-year government bond yield fell by 3bps to 4.03% and the 2-year government bond yield fell by 14bps to 3.79%. The US 10-year government bond yield rose by 15bps to close at 4.11% and the US 2-year government bond yield fell by 1bp to 4.86%.

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.