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Chapter 1: What is the main topic discussed in this episode?
A listener production.
Friday marked one of the largest tumbles of the month for local shares, but did we do enough to finish higher this week? And what are the key events which could drive markets in the upcoming week? Good afternoon, I'm Steve Daglian. It's Friday the 19th of June. Welcome to the CompSec Market Update.
Chapter 2: What caused the ASX 200's decline this week?
Hello, everyone. Happy Friday. Hope you've had a fantastic week. It was not a great end to the week for local stocks. So we've actually fallen now for the past two days. The ASX 200 down by close to 1% at the time of recording with just a bit of time remaining on the clock. It's the largest decline of the week as well. And it could also just be a case of some money being taken off the table.
Keep in mind that it does follow a four-day, a 4% winning streak for our share market. And we did hit a five-week high on Wednesday as well. And while the US market actually gave us quite a positive lead this morning, it was mainly driven by technology stocks, which is one of our smallest sectors here in Australia at
The good news though, is that we've still have done enough in the early part of the week to see the share market lifting very slightly over the past five days. So this week, our market has improved by about a quarter of a percent. So it could have certainly been worse. A lot has happened over the course of the week as well.
Certainly there was some good news, which helped markets, and then obviously also some bad in the past couple of days, which has perhaps weighed on our share market. So the good, firstly, the US and Iran officially signing that memorandum of understanding at the Palace of Versailles, which is near Paris.
That was something that was already flagged about a week ago, but it's a sign of the conflict de-escalating and it kicks off this 60-day ceasefire window now to negotiate a more expansive deal. So that was the good news. Also, the Reserve Bank on Tuesday kept interest rates on hold after three consecutive rate hikes. That never hurts markets.
One thing which did weigh on markets actually came through yesterday in the early hours of Thursday, and that was when the Federal Reserve held its meeting on interest rates. They decided to keep rates on hold. There were no surprises there. But what did receive attention was the Fed signaling a possible rate hike later this year.
And that has certainly been a little bit of a dampener on the market. So every quarter, they release this thing called the dot plot, which is a catchy name. But basically, it plots out what the 18 officials of the US central bank reckon might happen to interest rates over the coming years. Now, this time around, 9 of 18 officials... actually flagged a rate hike by December.
Three months earlier in March, most officials had flagged rates either on hold or rate cuts by the end of this year. So that was something that markets paid attention to. It was one of the reasons why the US dollar strengthened, why the Aussie dollar fell back, why commodity prices have fallen in the past couple of days as well.
Let's look at the different sectors locally today, though, because it certainly has been a bit of a mix as it has been most of the week. But the biggest weight has far and away been the materials, those miners. They've dropped back by about 4%. The financials were mixed today. CBA and NAB were up. But then we had declines from the likes of Westpac, ANZ and Macquarie. So a mixed bag there.
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Chapter 3: How did the Federal Reserve's meeting impact the markets?
So you've got stocks like Electro-Optic Systems, which is a standout today. It's being added to the ASX 200. But there are stocks like Guzman, IDP Education, SightMinder, Temple & Webster and WebTravel. They're all being removed today. And they've been some of the worst performers on the market in 2026. Later in the week, on Wednesday, we're going to have a very important update on inflation.
This is just for the month of May, and it comes just a week after the Reserve Bank kept rates on hold. But inflation is certainly one of the key things that markets pay attention to. We'll still be a long way out from the next decision by the RBA to what we'll do with interest rates in August. So it would actually still be a full seven weeks out from the RBA decision.
But this will certainly still be something that markets pay close attention to. A day later on Thursday, we'll get a very important update on jobs growth as well. That's another key indicator and measure that the RBA watches carefully for what happens to interest rates. So watch for that. And also Thursday night, there'll be the Federal Reserve's preferred measure of inflation.
Yes, they do have a preferred measure of inflation. So that will also be something that markets pay close attention to. And the Aussie dollar finally is a bit weaker. It was back below 70 US cents not too long ago. Now it's just ticked a little higher. It's sitting at about 70.1 US. On that note, have a great evening, everyone. A fantastic weekend. We look forward to seeing you next week.
This podcast is prepared, approved and distributed in Australia by Commonwealth Securities Limited, ABN 60067254399, AFSL 238814. The information does not take into consideration your objectives, financial situation or needs. Consider the appropriateness of the information before acting and if necessary, seek appropriate professional advice.
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