Economic Update – Bond Yields Surge Again

The 2023 reporting season has been and gone, with most meaningful share price adjustments determined for forward guidance rather than the results.  There were significant, but not unexpected, falls in profits from the large mining companies which impacted the overall level of corporate earnings.  Forward guidance was mixed with further updates expected from AGMs through October and November. ANZ, WBC, and NAB will report results for the year ended 30 Sept and will impact the near-term direction of the financial services sector which is a hefty 26% of the S&P SX200 index.  There is likely to be spotlight on expense growth, wage inflation and bank impairments.

Global markets have pulled back from recent highs as investors have shifted from a ‘soft economic landing’ scenario that includes rates reducing in early 2024, to a scenario where rates remain higher for longer. While we have been indicating that this would likely be the case for some time now, markets are now only just starting to adjust to the reality. Bond yields have surged with the US 10yr yield heading towards 5%.

Click the link to read the full economic update.  231004_NewsFeed_RoystonCapital.pdf (360 downloads )