The Australian share market experienced a decline in September, with the S&P/ASX 200 Index decreasing by 1.4% to close at 8,848.8 points. The Australian dollar strengthened over the month, appreciating by 1.1%, and is now trading at 66.1 United States cents per Australian Dollar.
The Reserve Bank of Australia (RBA) board maintained the target Cash Rate at 3.60% per annum. In light of higher-than-anticipated inflation figures and increasing consumer expenditure, bond markets currently reflect only a 33% probability of a rate cut at the upcoming RBA meeting in November.
Global equity markets delivered positive results during September. The United States S&P500 Index rose by 3.5%, the London FTSE Index advanced by 1.8%, the Japan Nikkei 225 Index increased by 5.2%, and the Hong Kong Hang Seng Index posted a gain of 7.1%.
After three reductions in the Cash Rate by the RBA earlier this year, signs of renewed support in the housing market have emerged. Over the past year, dwelling values have shown consistent growth, as illustrated below.
Source: Cotality
As highlighted in last month’s newsletter, the Federal Government's expansion of the 5% deposit home loan scheme will take effect this month, potentially boosting property demand among eligible first-home buyers.
While rising house prices present challenges for housing affordability, they contribute positively to consumer confidence, spending, and overall economic activity from an economic standpoint.
A key consideration for the RBA board will be balancing domestic economic improvement with prevailing market expectations and international trends, particularly following interest rate cuts in the United States.
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This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation, and investment objectives.