Australian Bond Exchange Weekly Update
19 Jun 2026
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Market Insights
- Busy week for global central banks
- RBA unchanged at 4.35% The U.S.
- Fed unchanged at 3.50%-3.75%
- BOJ hiked by 0.25% to 1.00%
- Oil prices keep falling
Key Points:
- Australia: The RBA left the cash rates unchanged at 4.35% p.a. at its June meeting. April CPI eased to 4.20% p.a., while Trimmed Mean rose to 3.40% p.a.
- United States: The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its June 2026 meeting. The latest U.S. CPI inflation rate is at 4.2% p.a. as of May 2026. Core CPI was more contained at 2.9% p.a.
- United Kingdom: The Bank of England held Bank Rate steady at 3.75% p.a., and CPI for April was 2.8% p.a., with Core CPI slowing to 2.5% p.a.
- Eurozone: The European Central Bank increased its key deposit facility rate by 0.25% to 2.25% p.a., and recent data show inflation in the euro area increased to 3.2% p.a. in May, up from 3.0% in April.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash Rate 4.35% p.a. | 4.2% p.a. to April 2026 |
| United States | Fed Funds 3.50–3.75% p.a. | 4.2% p.a. to May 2026 |
| United Kingdom | Bank Rate: 3.75% p.a. | 2.8% p.a. to April 2026 |
| Eurozone | Deposit Facility Rate: 2.25% p.a. | 3.2% p.a. in May 2026 |
Busy week for global central banks
This week was a busy one for global central banks, with policy meetings from the Reserve Bank of Australia (RBA), the US Federal Reserve, the Bank of England and the Bank of Japan. While interest rates were widely expected to remain unchanged at most meetings, the focus has shifted to policymakers’ commentary and forward guidance, particularly as markets look for clues on the timing of future rate moves. Attention was also firmly on the first press conference by the new Federal Reserve Chair, Kevin Warsh, following the FOMC meeting.
RBA left cash rate unchanged at 4.35%
Much to no one’s surprise, the RBA left the cash rate unchanged at 4.35%, following three consecutive 25 basis point rate hikes since February. For the first time since the conflict in the Middle East began, the Board was unanimous in its decision. With no policy change widely expected, attention was focused on the tone of the accompanying statement. There was something for both hawks and doves. The RBA maintained its firm stance on inflation, reiterating that it remains prepared to raise rates further if required. At the same time, the statement placed greater emphasis on the risks to economic growth. The Board acknowledged the recent run of softer domestic data, including weaker consumer spending, a higher unemployment rate, a slowing housing market and subdued confidence.
The U.S. Fed left rates unchanged
The Federal Open Market Committee (FOMC) left the federal funds rate unchanged at 3.50% to 3.75%, in line with market expectations, marking the first policy decision under new Chair Kevin Warsh. While the decision to hold rates was widely anticipated, the updated Summary of Economic Projections (SEP) struck a more hawkish tone. The median dot plot now forecasts the federal funds rate at 3.8% by the end of 2026, up from 3.4% in March, signalling that policymakers expect one additional 25 basis point rate hike this year.
The BOJ hiked as expected
The Bank of Japan raised its benchmark interest rate to its highest level since 1995. The BOJ increased its benchmark rate by a quarter percentage point to 1% and said rates would continue to rise in response to economic developments.
Oil prices keep falling
The confirmation of a US-Iran peace agreement and the planned reopening of the Strait of Hormuz on Friday removes a significant geopolitical risk premium from energy markets. Oil prices have already retraced much of their conflict-driven gains, with markets pricing out the war premium as supply risks ease. Lower oil prices should help ease global inflationary pressures over the coming months, supporting household spending and reducing businesses’ input costs. While some uncertainty remains until the agreement is fully implemented, the broader direction is favourable for global growth as lower energy costs combine with ongoing investment in artificial intelligence and digital infrastructure to support economic activity.
Crude Oil Price Movement
9.25% Magnetic Rail 2030 – Secondary Market Trading Flow Available!
Magnetic Rail Group Fixed Rate Note — 9.25% p.a., paid semi-annually to May 2030 — is now available to both retail and wholesale investors on ABE.
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Investment Overview
| Product: | Magnetic Rail Group Pty Ltd |
| Type: | Fixed Rate Note |
| Coupon: | 9.25% p.a., paid semi-annually |
| Maturity Date: | 24 May 2030 |
| Currency: | AUD |
| Min. Investment: | $50,000 AUD |
| Eligibility: | Retail and Wholesale Investors |
Overview
- Magnetic Rail Group (MRG) owns 100% of One Rail Australia Holdings Ltd (ORA), a leading rail haulage that has undertaken an A$175M notes issuance to refinance its existing Loan Notes.
- The new financing is in the form of a 5-Year, A$ Medium Term Note (“MTN”) and will be secured over all the assets of MRG, including its shares in One Rail Australia Holdings Ltd (“ORA”).
Magnetic Rail Group – Company Overview
Magnetic Rail Group (MRG) is a 50:50 joint venture between PT Asian Bulk Logistics and M Infrastructure Group Trust, established in 2022 to acquire and operate the coal haulage business of One Rail Australia (ORA).
Through its key operating subsidiary ORA, MRG is one of Australia’s leading coal haulage operators, with ~30% market share in the Hunter Valley (NSW) and a growing presence in the Bowen Basin (QLD). The business transports metallurgical and thermal coal to export terminals under long-term, take-or-pay contracts with blue-chip counterparties.
The cornerstone of this contracted revenue base is an exclusive agreement with Glencore plc (Moody’s Baa1 / S&P BBB+) through 2036, covering almost all of Glencore’s Hunter Valley coal production. Other key customers include Yancoal and Stanmore.
Operating Subsidiary- One Rail Australia (ORA)
ORA operates a modern fleet of 51 locomotives and 1,468 wagons, with an average age of ~10 years and a book value of ~$420m. The company has invested significantly in rolling stock and maintenance facilities, supporting reliable and efficient operations.
Looking ahead, ORA is expanding further in Queensland with three new locomotives and ~130 wagons set to enter service in 2025 under a haulage agreement with Stanmore. This strengthens its growing Bowen Basin presence while reinforcing contracted volumes.
Financially, ORA generates stable, predictable cashflows: ~99% of haulage volumes are under take-or-pay agreements, supporting forecast net operating cash flow of ~AUD 100m in 2025 against ~AUD 50m interest expense.
Example: How Fixed Income Works
A company issues a debt security with the following terms:
- Term: 5 years
- Coupon: 7.9% p.a., paid semi-annually
- Issue Price: $100
- Minimum Investment: $10,000 AUD
Investor Scenario: Semi-Annual Payments
Sarah may choose to receive income every 6 months. She receives $3,950.00 every 6 months (7.90% × $100,000 / 2). Over 5 years, she receives $39,500.00 in total income, plus her $100,000 principal at maturity (subject to no credit event or early redemption).
If she sells before maturity, she may receive more or less than $100,000 depending on market conditions.
Risks to Consider
- Interest – Movements in interest rates may impact returns and the value of the Notes.
- Issuer Risk- Return depends on the issuer’s financial stability.
- Liquidity Risk- These products may not be tradable or redeemable early.
- Complexity- May not suit all investors. Professional advice is recommended.
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World Economic Calendar
Prior
*Data accurate as at 19.06.2026
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