Inflationary forces continued to intensify in key regions, which suggested inter- est rates could be raised more quickly and more aggressively than previously anticipated. The likelihood of rising borrowing costs also appeared to spook equity markets, which performed poorly over the month.
Trimmed mean inflation – the Reserve Bank of Australia’s preferred underlying measure of price increases – rose 1.4% in the March quarter; almost double the official forecast from as recently as February.
On an annual basis, inflation has quickened to 3.7%; up from 2.5% in the December quarter and well above the Reserve Bank of Australia’s 2%
to 3% target range.
Geopolitical tensions remained in focus in June as renewed conflict in the Middle East disrupted oil supply routes and raised concerns about broader regional instability. Oil prices spiked as tensions rose and supply concerns mounted, though moderated after a ceasefire was called 12 days later. Brent closed June +5.8% higher at $67.61.
While the month began with constructive discussions and agreements between the US and some of its trading partners, uncertainty returned to the market after President Trump threatened to impose new tariffs on Europe and multiple large corporates such as Apple, Samsung and Mattel, and again near month-end as the Court of International Trade deemed the global tariffs to be “contrary to law.”
