Markets React to Economic Shifts, US Dollar Dips
Global markets showed mixed reactions today amid shifting economic signals, including concerns about US debt and trade uncertainties. These movements follow a week of volatility, with investors closely watching developments in the Middle East and economic policy decisions worldwide.
Market Snapshot
The Australian stock market closed 0.4 percent lower at 8,514.2 points. Conversely, the Nikkei increased by 1.6 percent to 40,197 points. The S&P 500 rose 0.8 percent to 6,141 points, and the Nasdaq saw a 1 percent increase, reaching 20,167 points.
Superannuation Gender Gap Addressed
New data highlights that women retire with significantly less superannuation than men. This disparity widens during the years women take time off work to raise children. However, a recent change means superannuation will be paid on parental leave starting in July, which is a historic achievement.
This change aims to tackle retirement inequity and improve financial outcomes for women.
Middle East Tensions Ease, Oil Prices Fall
The recent Middle East oil crisis has subsided for now, causing oil prices to fall and shares to rise to near-record highs. According to Shane Oliver, AMP’s chief economist, the situation stabilized after Iran’s response was viewed as symbolic.
“Oil supply is key when it comes to conflict in the Middle East.”
—Shane Oliver, AMP’s chief economist
US Dollar’s Decline
The US dollar continues to struggle, hitting its lowest level since March 2022. Several factors contribute to this decline, including the strong inverse relationship between the S&P 500 and the US dollar, uncertainty regarding Fed leadership, and concerns over US growth.
“The US dollar Index (DXY) put in a daily close below its June 12 low of 97.61, with price trading to a low of 97.01, the weakest level since March 2022.”
—Chris Weston, Market analyst from Pepperstone
The US dollar index has dropped 2.1 percent in June, marking its fifth consecutive monthly fall. Foreign investors are also reducing their exposure to the US. As of May 2024, the US debt held by foreign investors was approximately $7.9 trillion, indicating decreasing confidence in the US economic outlook (US Treasury).
Rental Income and ATO Statistics
ATO statistics show that 2.3 million Australians declared rental income in 2022-23. The majority of these landlords, about 71 percent, own only one investment property. The ATO released the statistics today.
The Productivity Roundtable
Treasurer Jim Chalmers has issued invitations to a small group of people to discuss solutions for the nation’s lagging productivity growth. The initial list of attendees includes representatives from various sectors, such as trade unions, business councils, and social services.
The Australian Dollar’s Rise
The Australian dollar is currently at its highest level this year, trading at 65.55 US cents. This strength is attributed to US dollar weakness and a rise in iron ore prices, Australia’s largest export commodity. This is the highest the Aussie has been since November 2024.
Tax Avoidance by High Earners
The Australia Institute analyzed ATO data, revealing that 91 individuals earning over a million dollars in 2022-23 paid no tax. They claimed around $390 million in deductions. The analysis showed these individuals claimed $62.8 million in deductions for accountant and lawyer fees.
