Economic Pulse: A Snapshot of Key Market Trends for June 2025
Staying informed on the latest market and economic trends is essential for any investor. The June 2025 Mercer Chart Pack provides a comprehensive overview of the global financial landscape, offering insights into everything from the Australian economy to the performance of various global asset classes. This summary captures the key highlights from the report.
It's important to note that the information presented reflects historical data, and as stated in the report, "Past performance is not a reliable indicator of future performance".
The Australian Economy at a Glance
As of June 2025, the Australian economy presents a mixed but stable picture. Here are some of the key metrics:
Inflation: The year-over-year inflation rate is at 2.4%. Inflation has seen a significant decline since its peak in 2022.
Cash Rate Target: The cash rate target is holding at 3.85% p.a.
Unemployment: The unemployment rate is 4.1%, with employment growth at 2.7%. Unemployment rates have remained near post-Covid lows.
Wages and Savings: Wage growth is at 3.4%, with average weekly earnings at $1,511. The savings ratio is 3.8%.
Sentiment: Consumer sentiment sits at 92.6, while business confidence is at 1.9.
In June, Australian shares saw a rally, which was influenced by a softening labor market and a decrease in inflation, leading to expectations of potential rate cuts from the RBA.
Global Asset Performance Highlights
June was a month of strong performance for global equities and fixed income. Emerging market shares, in particular, saw notable gains that were greater than those of international equities.
Here’s a look at the rolling 12-month returns for various asset classes to June 2025:
Overseas Shares (H): 18.6%
Emerging Markets (UH): 17.5%
Overseas Small Caps (UH): 17.2%
Emerging Market Debt (UH): 16.0%
Global Listed Infra (H): 14.7%
Australian Shares: 13.7%
Australian REITs: 13.8%
Cash: 4.4%
Over the last five years, US equities have outperformed their international developed counterparts. In the emerging markets space, the Korean stock market was a leader in June.
Market Movers and Investment Themes
Several key themes emerged in June 2025:
Commodities: Commodity prices saw a rise, largely driven by an increase in energy prices. Crude oil prices surged following military strikes on Iran's nuclear facilities before falling after a ceasefire was announced. In contrast, gold prices declined as the demand for safe-haven assets decreased.
Volatility: The US Volatility Index (VIX), often called the "fear index," has been trending downwards since mid-2022. However, it experienced a surge after President Trump announced tariffs, causing a panic among global investors.
Global REITs: Global Real Estate Investment Trusts (REITs) delivered positive returns but did not perform as well as the broader global equity markets. Australian REITs, however, performed well with strong returns.
The Power of Consistent Investing
The report concludes with a powerful illustration of dollar-cost averaging. A chart tracking investment in the S&P/ASX 300 from June 1995 to June 2025 shows that investing consistently over a long period can significantly increase portfolio outcomes. This serves as a valuable reminder of the benefits of a disciplined, long-term approach to investing.
Reference
Mercer. (2025). Mercer chart pack. Mercer Investments (Australia) Limited.
If you wish to learn more please give us a call or book a time to visit us at our Adelaide Based Offices.
General Advice Warning:The information on this website is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making an investment decision in relation to a financial product.