Interest rate policy remained front and centre of attention locally and globally. The Reserve Bank of Australia raised the Official Cash Rate by 0.50 percentage points for a second consecutive month, as anticipated.
Most investors are expecting another half percentage point increase in borrowing costs in early August, when the Reserve Bank of Australia meets again.
Australian shares registered gains of more than 5%. Most major overseas share markets performed even more strongly – the MSCI World Index closed the month 8.0% higher, with selected markets enjoying double-digit gains. This made July the best month for risk assets since late 2020, when encouraging Covid vaccine trial results were first reported.
The presidential election in the US on 5 November could dominate headlines during October, before the next meeting of the Federal Reserve later that same week. Investors are already debating whether a further reduction in borrowing costs in the US could be announced following this meeting.
The global economy is being shaped by conflicting triggers. These include productivity-boosting technology innovations, geopolitical tensions and the strident efforts of central banks to bring inflation under control. We examine the economic outlook and discuss the implications for your retirement savings.
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