Market Update June 2023

All major global equity markets produced positive returns for the month of June.

The value of the Australian Dollar increased in aggregate against a basket of major foreign currencies, decreasing overseas investment returns when measured in Australian dollar terms. International and Australian fixed interest markets posted modest negative returns with bond yields broadly increasing across maturities.

The Board of the Reserve Bank of Australia (RBA) met on 6 June to discuss global and domestic economies and markets, and to review their monetary policy settings. The RBA increased the cash rate target by 25 basis points, bringing the target to 4.10%. Whilst discussing their monetary policy decision the minutes stated “While [bringing CPI back to target] remained the Board’s objective, members noted that a more prolonged period of above-target inflation would increase the risk that firms’ and households’ expectations for inflation rise. If this occurred, high inflation would become more persistent with the result that interest rates would need to be higher for longer”. The following day Governor of the RBA, Philip Lowe, made a speech entitled “A Narrow Path” where he stated, “I acknowledge that the use of [tightening monetary policy] tool comes with complications. Its effects are felt unevenly across the community, with rising interest rates causing significant financial pressure for some households. But this unevenness is not a reason to avoid using the tool that we have” and “I want to make it clear, though, that the desire to preserve the gains in the labour market does not mean that the Board will tolerate higher inflation persisting.” On 4 July, whilst not in the timeframe captured by this commentary, the RBA maintained the cash rate at 4.10%.

The Federal Reserve (the Central Bank of the United States) did not increase interest rates in June, the first pause after more than a year of consecutive hikes. Released in June, the US CPI figure grew 4% year-on-year to the end of May, the lowest since April 2021. The move was dubbed a “hawkish pause” by the media and market participants as although the cash rate target didn’t increase, the Federal Reserve Chairman, Jerome Powell, stated that “looking ahead, nearly all committee participants view it as likely that some further rate increases will be appropriate this year to bring inflation down to 2% over time”. 

Late June saw an unexpected potential coup in Russia, as the head of the Wagner Group mercenaries, Yevgeny Prigozhin, accused the Russian military of firing on his own soldiers. Wagner forces then seized a city in Russia before turning towards Moscow. A matter of hours later, however, the coup was disbanded as Belarussian President, Lukashenko, brokered a deal with Prigozhin and the Kremlin that saw Prigozhin’s exile to Belarus in exchange for Russia dropping charges against him and his soldiers.

In early June the United States suspended the federal debt ceiling until 1 January 2025 as Congress passed the Fiscal Responsibility Act, which was signed into law on 3 June by President Biden. The Act avoided the United States defaulting on its debt, which was estimated to occur on 5 June by the Treasury Secretary, Janet Yellen. Yellen stated, “I continue to strongly believe that the full faith and credit of the United States must never be used as a bargaining chip”, referring to the political posturing of Congress members that brought the United States so close to default.


Major developed foreign equity markets produced strongly positive returns during June. Developed markets (excluding Australia) returned 5.6% on a currency-hedged basis (and 3.1% unhedged in Australian dollar terms, reflecting the rise in the value of the Australian dollar). The best performing of the major foreign markets, for the second consecutive month, was the Japanese stock market (Nikkei 225 Index) returning 7.6% (in local currency terms) in June. 

The Australian stock market (S&P/ASX 200 Index) was positive during June returning 1.8%, with 7 out of 11 industry sectors experiencing positive returns. Materials, Information Technology and Financials were the best performing sectors returning 4.7%, 3.5% and 3.1% respectively. The standout worst performing sector was Healthcare returning -6.6%.

From a foreign developed market perspective, all 11 sectors produced positive returns. Consumer Discretionary, Industrials and Materials were the best performing sectors producing returns of 10.3%, 8.7% and 7.1% respectively. The worst performing sector was Utilities, which still generated a healthy return of 1.8% over the month.


The Australian government bond yield curve shifted upwards in June, with Australian fixed interest returns for the month of -2.0% (Bloomberg AusBond Composite Index). The slope of the Australian government bond yield curve inverted in June as the two-year yield increased by 0.67% to finish the month at 4.22%, whilst the ten-year yield increased by 0.42% to close at 4.02%.

Over June, major developed global government bond yields were mixed but in aggregate rose. The Bloomberg Global Aggregate Index (Hedged) returned -0.2%. Over the ten-year term, the United Kingdom Government yields also rose the most of major developed governments by 0.21%, followed closely by the United States Government yields which rose 0.19%.


The Australian Dollar increased against all major foreign currencies in June. The Australian Dollar increased 6.1% against the Japanese Yen, 4.7% against the Chinese Renminbi and 2.5% against the United States Dollar. The Australian Dollar finished the month at 0.6664 US Dollars, up 1.6 US cents over the month.


Commodity prices continued to be volatile over June and the S&P GSCI Commodities Index ended the month up 2.3%. The price of WTI oil and Brent oil rose 3.7% and 3.1% respectively and notably the price of natural gas rose 23% over the month. Of the precious metals, the price of gold decreased 2.2% and the price of silver decreased by 3.0% in June. 

Performance of key markets over relevant time periods to 30 June 2023:

Asset class Index Month* (% change) FYTD* (% change) 1 year* (% change)
Australian Shares S&P/ASX 200 Acc. Index 1.8%  4.5% 14.8%
International Shares MSCI World Ex Aust Unhedged A$ 3.1% 17.5% 22.6%
International Shares MSCI World Ex Aust Hedged A$ 5.6% 14.7% 16.6%
US Shares S&P 500 Index 6.6% 16.9%  19.6%
UK Shares FTSE 100 Index 1.4% 3.2% 9.1%
Japanese Shares Nikkei 225 Index 7.6% 28.6% 28.6%
Australian Listed Property S&P/ASX 200 A-REIT Index 0.0% 3.9% 8.1%
Australian Fixed Interest Bloomberg AusBond Composite Index -2.0% 1.5%  1.2%
Australian Cash Bloomberg AusBond Bank Bill Index 0.3% 1.7% 2.9%
Currency AUD/USD
2.5% -2.2% -3.5%

*Percentage changes in returns are for periods over the month of June (Month), calendar year to date 31 December 2022 to 30 June 2023 (CYTD) and the financial year to date 30 June 2022 to 30 June 2023 (FYTD). Past performance is not an indication of future performance.

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Any general advice has been prepared without taking into account your objectives, financial situation or needs. Before you act on any general advice, you should consider whether it is appropriate to your individual circumstances. Before making any decision, you should obtain and read the relevant Product Disclosure Statement and Target Market Determination or by calling 1300 033 166. You may wish to consult an adviser before you make any decisions relating to your financial affairs. To speak with an Adviser from TelstraSuper Financial Planning call 1300 033 166.