RBA: Government bond markets have functioned well

The Reserve Bank of Australia (RBA) is out with its September issue of the economic bulletin, offering insights into the economy and the financial system.

Key quotes

Economic conditions for small and medium-sized enterprises (SMEs) improved in the second half of 2020 and early 2021, although measures to contain the recent outbreaks of COVID-19 have affected firms in much of Australia.

Climate change affects banks because of the impact it has on the value of assets used as collateral for loans and the incomes borrowers use to repay their loans.

China, Japan and South Korea have all set targets to achieve net-zero carbon emissions by around the middle of this century.

Workers who lose a job tend to experience large and persistent earnings losses.

Except for a period of dysfunction in the early months of the pandemic, government bond markets have functioned well.

The Chinese labor market has recovered quickly following the sharp economic downturn caused by the COVID-19 pandemic.

China’s economic policy response to the COVID-19 pandemic has been less stimulatory than the response after the global financial crisis because Chinese authorities have sought to avoid fuelling risks in the financial system.

AUD/USD fades rebound

Following the RBA bulletin release, coupled with the mixed Aussie jobs report, AUD/USD reversed the early Asian gains while taking a U-turn from the intraday high near 0.7350, down 0.05% around 0.7330.

Also read: AUD/USD pauses run-up to 0.7350 on mixed Australia employment details