In June, a deteriorating global growth outlook continues to push both the cash rate and global bond yields lower. This has driven a flight to defensive sectors such as A-REITs and infrastructure, given their historical high correlation. As a result, brokers continue to upgrade many of these defensive names given the lower risk free rate used in their valuation models. Meanwhile, domestic headwinds continue to intensify. The Australian housing market remains sluggish and lending restrictions are tight, whilst inflation and wages growth is anaemic. In an attempt to stimulate the economy, the RBA cut official interest rates to a record low 1% during the month.