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Escalating natural disasters are driving a new phase for sustainable finance in the real estate and healthcare sectors as investors look to adaptation and resilience.

Our Q1 2026 Sustainable Finance Market Update reviews global and Australian market activity amid continued issuance moderation. This edition explores trends across sustainable bonds and loans, highlights notable transactions from the quarter and examines developments shaping the role of sustainable finance in supporting Australia’s digital infrastructure transformation. You’ll also find the latest market news and insights from across the sustainable finance landscape.

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Financial markets strategy

The Australian dollar was coasting above 0.7200+ for much of last week but a bruising end to that week and a soft start Monday have seen it give back the best part of US1.4c from last week’s highs, to 0.7130. The global bond sell‑off is now clearly bleeding into risk assets, and the Australian dollar heads into a busy week with plenty to digest - US‑Iran headlines, the FOMC minutes, and flash May PMIs. Locally, focus falls on May consumer sentiment and the RBA minutes on Tuesday, followed by April labour force data on Thursday.

The Australian dollar pushed to fresh four‑year highs last week, topping out at USD 0.7278, as another wave of optimism around the US-Iran war took hold. The RBA effectively signalled a pause when they hiked last week and US April payrolls beat expectations, but neither proved a drag. Nor has the US rejection of Iran’s counter‑offer at the start of this week. The Australian dollar is beginning to develop a degree of familiarity at these higher levels just above 0.72. The week ahead is busy and important, featuring the Federal Budget, Q1 Wage Price Index and US April CPI. Markets will also closely monitor the Trump–Xi summit in Beijing.

The Australian dollar rose almost 1% last week, and starts the new week tentatively exploring 0.7200+. The Australian dollar’s gains were bested only by the Japanese yen last week, whose surge was fuelled by intervention. This encouraging Australian dollar performance was matched by repeated record highs in equities, and came despite a hawkish FOMC and threats of renewed US strikes on Iran. The week ahead is dense with important data and event risk, including the RBA and US payrolls.

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