Markets are complacent, but volatility is coming
With the S&P 500, among other indices, brushing against record highs and tech stocks powering ahead, it would be easy to mistake this rally for resilience.
But it's not resilience, it's complacency.
This isn't about fearmongering. It's about realism. While equities flash green, warning signs are piling up fast: renewed trade tensions, stubborn inflation risks, ballooning government debt, and a bond market that's growing less patient by the day.
Add to that the thin trading volumes of the summer months, where small shifts can trigger outsized moves, and we're staring at the likelihood of a sharp uptick in volatility.
Take trade. The US has reignited its protectionist agenda, with fresh tariff threats aimed squarely at China. Talks have stalled, temporary deals remain toothless, tariff levels are still punishing, and supply chains remain under pressure.
With rhetoric on both sides remaining pretty much the same, markets are underestimating the risk of another escalation. Unlike previous episodes, this is not a minor skirmish, it's a deepening economic contest between the world's two largest economies.
Inflation is another pressure point. Investors are betting that price growth will continue cooling, nudging central banks toward rate cuts. That's a risky assumption.
The next round of data could easily surprise to the upside. Labour markets remain tight, and input costs from tariffs and energy are beginning to creep higher. A fresh inflation spike could push rate-cut hopes further into the distance, and valuations would have to adjust accordingly.
Also, the bond market is already signalling discomfort. Treasury yields have been climbing, not because of runaway growth, but because of mounting supply.
The US is issuing record levels of debt to finance deficits that show no sign of narrowing. Overseas buyers, especially China and Japan, are stepping back.
The result is weaker demand, rising yields, and a higher cost of capital rippling across the economy. This isn't the backdrop for a smooth rally in equities.
At the same time, corporate America is flashing its own warning lights. Layoffs are accelerating.
Major firms across tech, finance, and entertainment have all announced significant job cuts in recent weeks. While markets perversely reward these announcements in the short term — interpreting them as margin-boosting measures — the deeper implication is that companies are preparing for slower growth. The earnings optimism driving stocks upward is, in many cases, built on sand.
Yet despite all of this, there's still a strong case for opportunity.
Volatility isn't inherently negative. It's disruptive, yes. But it's also the source of market mispricing, and mispricing is what creates the space for outperformance. When consensus gets lazy, as it has now, bold positioning has room to shine.
That's especially true in this moment. The convergence of rapid technological progress — particularly in AI, automation, and productivity-enhancing innovations — is starting to reshape the profit potential of entire sectors. These forces are disinflationary over the medium term, even as short-term price pressures remain stubborn.
The companies that harness them early will not just weather volatility, they'll emerge stronger.
The key is not to flee risk, but to understand it and position intelligently. Passive portfolios anchored to a backward-looking view of the economy are vulnerable.
Diversification across geographies, sectors, and asset classes, will matter more than ever. So will exposure to forward-facing megatrends, from clean energy to semiconductors to AI infrastructure.
This summer, markets won't drift quietly. With liquidity thinner, every data release and policy signal will carry more weight.
Sudden swings are not just possible but likely. But that's precisely what makes this period one of the most promising entry points in recent memory. Those who wait for perfect clarity will miss the window.
The exuberance in today's equity markets is not sustainable. It's built on the hope of soft landings, timely rate cuts, and diplomatic breakthroughs.
But hope isn't a strategy. The coming months will test the market's assumptions and many won't hold. Yet that doesn't mean retreat is the right move, it means preparation is key.
Investors willing to engage with this volatility, not hide from it, are far more likely to capture the upside when it comes.
Nigel Green, is the group CEO and founder of deVere Group, an independent global financial consultancy.
The views, information, or opinions expressed in the interviews in this article are solely those of the author and do not represent the views of Stockhead.
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Sydney Morning Herald
2 hours ago
- Sydney Morning Herald
PM needs to be wary of becoming too reliant on China
While a fair portion of what Peter Hartcher said in his article was fair enough ('' Adolescent' nation coming of age ', July 19), there was no mention of how Prime Minister Anthony Albanese's Beijing trip is going to make us even more reliant on China for trade given that Albanese has said this was his main aim. In fact, we are reliant on China for just about everything except food. Our free trade agreements over the years, especially those with China, have successfully killed most of our manufacturing. During COVID, when China decided to punish us instead of doing the hard work of diversifying, our bottom lip started wobbling, we put our cap in our hand and we begged for mercy. Since then, we are even more reliant on China. To be so reliant on any country is stupid, but to be almost totally reliant on a country with a human rights record such as theirs, with such obvious military aspirations, and a country that we see as a possible future enemy, is sheer madness. To me, this is evidence of Australia's continued adolescence. In fact, I think an adolescent would be smarter. Andrew Cronin, Robertson Yes, Australia is being forced to grow out of its adolescence due to Trump's disruption of the world order and the decline of America's central global role. No one, except the myopic opposition, can have any criticism of the way Albanese has been navigating the diplomatic US-China tightrope. His attitude is sensible: 'You don't have time to see me and want to put tariffs on our goods and threaten delivery of the submarines? No problem, we have other friends who want us to join their party.' While the US has been a reliable ally over the past eight decades, its star is waning due to tyranny of distance, its unfettered economic model and its choice of leadership. During this time, a cold, calculated focus on our own long-term self-interest is what Albanese is demonstrating, while not being threatened by pressure from either China or the US. Unless the opposition has a solid game plan to counter the Albo-Wong strategy, it should work with the government to achieve what is best for us. Manbir Singh Kohli, Pemulwuy Capital gains pains Sorry, William Lloyd (Letters, July 19), but most economists expected a CGT to do what any tax does – discourage people from investing in that area. That is what happened to housing from 1985 to 1988, when the entire economy took off. This lasted just two years and property prices fell and remained low until 1999, when John Howard introduced his 50 per cent discount on the amount taxed for CGT. While I know that correlation does not prove causation, house prices took off immediately on the introduction of that amendment and have continued that upward trajectory for 26 years since. Why income from property profits should be taxed at a fraction of the rate that income from any other source is taxed remains a mystery to me. Barry Harrod, Fig Tree Pocket (Qld) Valid criticism Richard Flanagan expertly draws on Jewish writers to demonstrate the folly if our PM adopted the Segal report's recommendations (' PM must disavow and abandon Segal report ', July 19). Antisemitism, like all other forms of racism, is not supported by most Australians. We are at heart the proud outcome of our indigenous and ethnic diversity. Australia is also a democracy. Criticism of the Israeli state or Zionism is neither antisemitic nor racist. Robbing us of our right to criticise the egregious actions of nation states is tantamount to destroying our own democracy. Do that at your own peril. Brian Barrett, Padstow In Australia 2025, Jewish students are harassed on campus, and Jewish artists and academics – even ones with a history of speaking up for Palestinians – are excommunicated for disagreeing with the modern progressive dogma that Israel is evil. Jewish-owned businesses are vandalised and synagogues are burnt. But we are told by Richard Flanagan that 'leading Jewish figures' such as Louise Adler (who in reality represent a fringe minority of Australian Jews) are calling reports of antisemitism exaggerated. We are told that the IHRA definition of antisemitism says that criticism of Israel is antisemitic, when it explicitly says this is not the case. Gaslighting at its finest. Tim Peach, South Perth (WA) As a child of Holocaust survivors, I believe it is essential that the Executive Council of Australian Jewry condemn the war of annihilation waged by Israel's Netanyahu government against the Palestinian people in Gaza and the West Bank. It also behoves Jillian Segal, Australia's special envoy to combat antisemitism, to unequivocally condemn the inhumanity of Netanyahu in his ruthless and indiscriminate killing of Palestinian women, children and men according to the false doctrine of 'collective punishment', which is regarded as a war crime by the United Nations and other bodies such as the International Criminal Court, the International Court of Justice and Amnesty International, among others. John-Janusz Ebel, Caulfield North (Vic) Plastic not fantastic Like most Australian consumers, I want to do the right thing when it comes to recycling plastics. So I was horrified, but not altogether surprised, to read Hannah Kennedy's feature (' The plastic that contaminates our recycling stream', July 19). It seems that despite the efforts of people such as me, companies, watchdogs and governments are all dragging the chain when it comes to plastic recycling standards and product symbols. Silly me. Turns out the whole area is a minefield – businesses labelling their products recyclable when they are not, different local councils with different rules, different rules applying to local and overseas markets, products without symbols indicating they can be recycled when they cannot be – and so on. A dog's breakfast, indeed. It's time to fix this problem. Consumers must lobby their elected representatives and boycott companies that make misleading and sometimes dishonest claims about their products. Jane Mundy, Balgowlah According to Hannah Kennedy's article, many of the product symbols commonly used are misleading and incomprehensible. What about simply having 'Recyclable in Australia' shown on all relevant containers and packaging? It would be simple and effective and make it easy for all to do the right thing. Wendy Crew, Lane Cove North Latham can't be avoided Unless a government has an absolute majority, it will need to work with independents and minor party members to get legislation passed, regardless of political persuasion, moral compass or alleged sins of said parliamentarians. Why, then, do we demonise the NSW government for working with Mark Latham on matters of policy and law (' NSW Labor vowed not to work with Latham. The reality is complicated ', July 19)? He is a member of Parliament and as such, his vote counts. The government is not supporting Latham; it is asking him to support them on political matters. I don't see a problem. Gerianne Rudd, Toowong (Qld) We read that Liberal Upper House leader Damien Tudehope worked with Mark Latham to oppose Labor's controversial cuts to the workers' compensation scheme, which seems to have angered Premier Chris Minns. Yet the premier had no qualms about collaborating with the Shooters, Fishers and Farmers Party to try to push through these same cuts. The premier has opened the door to a plan by Shooters to establish a new 'hunting authority'. Apparently, Latham's alleged personal foibles count for more than the risk of allowing shooters to intrude onto public land and blast away at supposedly 'game and feral animals'. The approval of night shooting and guns with silencers is a chilling prospect. It would not only be a tragedy for wildlife but for unwary members of the public. Shooters will even be paid a bounty for the kill. We presume that won't be paid on people who cop a bullet. Jan O'Leary, Springwood Correspondent Jack Robertson decries the 'wowserish curtain-twitching and public hysteria about private and consensual sexual behaviours' concerning Mark Latham (Letters, July 19). Meanwhile, Latham was found to have defamed lower house MP Alex Greenwich to the tune of $140,000 in damages in a tweet targeting Greenwich over his sexuality. Can your correspondent please clarify the difference between his pearl-clutching concern about Latham's 'private and consensual sexual behaviours' and the aforementioned Mr Greenwich's 'private and consensual sexual behaviours'? Nick Andrews, Bellevue Hill Trump's Achilles Be very careful, Mr Trump ('Trump taunts Murdoch as he files $15b lawsuit over Epstein story', July 19). You may have been able to dismiss some of your loyal followers over the Epstein saga, and even rid yourself of your biggest donor, Elon Musk. However, Rupert Murdoch is another matter altogether. If you alienate Murdoch, keep in mind his empire has been, and will be, there for a lot longer than four years. Perhaps Murdoch's critics might forgive him for everything if he rids the world of this serial pest. Mary Lawson, Marrickville I read that Trump is suing Murdoch for $15 billion for defamation. His lawyers claim a newspaper article 'malign[s] President Trump's character and integrity'. Question: how can a convicted criminal have character and/or integrity worth $15 billion? Peter Duffy, Burra Has Trump finally done something useful in suing Murdoch? Or has Murdoch actually given us some truth in his rags, calling out a convicted criminal? Paul Fergus, Croydon Wow, I almost find myself in the very strange position of wishing Murdoch well. Judy Hungerford, Kew (Vic) Houses of God I think correspondent Jacqui Keats is being rather uncharitable on the subject of churches building high-rise unit blocks (Letters, July 19). Now more than ever, churches need income, especially to house and sustain their ministers and priests, and all the help and succour they give to society besides providing spiritual support to the community. Churches are also suffering the high cost of living and if it means building high-rise apartments, then so be it. Lynne Zahra, Epping Correspondent Tony Doyle wrote that high-rise apartments built by churches were closer to heaven, but with all those extra cars, they will also need deeper basements. It gets satanically hotter parking down there. Yours warmly. Russ Couch, Woonona Respect the planet Millie Muroi has written an important article about the need for 'clear goals' concerning environmental management (' Like ChatGPT, we need clear goals and rules. Otherwise, we could make bad decisions ', July19). After all, if we don't know where we want to go, it doesn't matter which bus we get on. Unfortunately, the goals we espouse involve growth, especially in terms of the economy and population size, both of which being achieved at the expense of the environment. Since this environment provides our life-support system, it is increasingly imperative to address these damaging growth factors and find sustainable, ethical alternatives. Alan Jones, Narraweena At US behest Does anyone believe that the delivery of the 49 Abrams tanks promised to Ukraine was delayed because of 'logistics challenges' (' Australian tanks arrive in Ukraine after nine-month wait ', July19)? I believe it's more likely the nine-month wait was caused by the need to gain Washington's approval. Australia is at the mercy of United States decision makers – or maker. We have out-of-service, US-made Abrams and don't need them. Ukraine does. Australian pledged to help Ukraine, and in October 2024 we said we would send them 49 tanks immediately. The ABC and others report that the United States refused to give us permission to send the tanks to Ukraine. How could Australia have gotten in this deplorable position? Why would our sovereign country need any other country's permission? This raises the question of what else we need permission from the United States for. Carol Dance, Wollstonecraft Ages of consent While many politicians favour lowering the voting age in Australia and elsewhere, there doesn't seem to be a similar enthusiasm for lowering the age at which young people should be treated as adults in court (' Could Australia follow UK's 'shock' move to lower voting age to 16? ' July 19). If 16-year-olds are mature enough to have an equal voice in selecting the government, surely they are mature enough to accept the consequences of their illegal actions as an adult. Or is this lowering of the voting age just pandering for votes rather than a well-reasoned view of maturity? Remember, once the voting age is lowered, there will be no going back. Steen Petersen, Nanaimo (Canada) Not appy, Jen Thank you, Jenna Guillaume (' The app-ocalypse: Please, I beg, don't make me download one more app ', July 19). I find the world of apps exhausting. Like Jenna, I try to avoid them by using my trusty computer, yet somehow I end up with that dreaded word 'app'. Am I sounding like a grumpy old woman? Perhaps I could find an app to help me. Philippa Reiss, Port Macquarie Harmony to discord Best meme from that kiss-cam moment (' CEO of $1.5b tech firm appears caught out on Coldplay 'kiss cam'? July 19)? 'Coldplay haven't released any singles for ages – but they created two last night.' George Zivkovic, Northmead Bastardly act Richard Glover's article about Australian English, including our multiple meanings of the word 'bastards' – from insult to compliment to collective noun – jogged my memory about a story from the 'bodyline' Ashes series in the 1930s (' Do Australians have the best possible version of English? ' July 19). After a particularly acrimonious session, English captain Douglas Jardine stormed into the Australian dressing room to demand an apology after he had been sworn at by an Australian player. Vic Richardson, the Australian captain, called the team together and asked 'which one of you bastards called this bastard a bastard?' Ian Morris, Strathfield
The Advertiser
7 hours ago
- The Advertiser
Peek into surprise RBA decision as rate cut on cards
A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700.
News.com.au
8 hours ago
- News.com.au
‘Important': Senior Labor minister defends PM's China trip, says ties collapsed under Coalition
A senior Labor minister has hit back at the opposition for criticising Anthony Albanese's lengthy state visit to China, saying the relationship with Australia's biggest trading partner had 'broken down' on the Coalition's watch. The Prime Minister spent much of the last week touting Australia's tourism, trade and research offerings in Shanghai, Beijing and Chengdu as part of a five-day business and diplomatic blitz. But the Opposition has argued the trip did not produce any tangible outcomes, despite several agreements being signed. Attorney-General Michelle Rowland said on Sunday she found the 'criticism quite extraordinary considering that since we came to government we have removed some $20 billion of trade impediments with China'. China imposed trade restrictions during a trade war with the Morrison-Coalition government. 'We now have in everything from wine to lobster, not to mention the fact that China is our single biggest trading partner,' Ms Rowland told Sky News. 'Our resources sector relies on that relationship.' She noted that Mr Albanese's visit was 'at the invitation … of China'. 'He went with a significant business delegation,' Ms Rowland. 'This is about creating jobs and extra trade opportunities for Australia, and it's important that we maintain this vital relationship.' The business community, represented by the Business Council of Australia (BCA), has praised the trip. The BCA was central to many of Mr Albanese's engagements in China, including high-level talks with Chinese officials and business leaders. With Mr Albanese meeting with Xi Jinping while a face-to-face with Donald Trump elusive, Ms Rowland was asked how she thought the China trip would go down in Washington. 'Our relationship with China is obviously important, as is our relationship with the United States,' she said. 'But here, there are different purposes. 'We will engage in the national interest wherever we can with China. 'We will always act in the national interest, and often we will disagree. 'But this is important from the perspective of our trade and of stabilising that relationship, which, quite frankly, had broken down under successive Liberal governments. 'And it's important that we have a government now that's acting in our national interest, in the interest of jobs and trade and certainty.' Ms Rowland, who sits on the National Security Committee, also downplayed concerns around the Trump administration's demand to hike Australian defence spending and its commitment to AUKUS – a $360bn submarine pact with the US and UK underpinning Canberra's defence strategy for the first half of the 21st century. While Mr Albanese was in China, the man leading the US review of AUKUS hinted Australia would need to guarantee support for the US if a conflict broke out in the Indo-Pacific over Taiwan. It came after the Financial Times reported Mr Colby asked Australia and Japan what they would do to defend the democratically self-governed island from China. Ms Rowland said she was 'not going to engage in hypotheticals' but that the Albanese government did 'not support a unilateral change' on Taiwan. 'What I will note, in going to a related issue about defence spending, that we recognise the US has called for this of a number of its allies,' she said. 'But again, I would point out that we are spending some $10bn over the forwards and nearly $60bn over the next decade on defence spending. 'We will act always in the national interest, and we will ensure that our capabilities are up to scratch.' She refused to comment on National Security deliberations on the US' AUKUS review, but said that 'there is nothing unusual about a new administration having a review of these relationships'. 'But again, we view AUKUS as fundamental to our relationship with the United States, and we are confident in its execution,' Ms Rowland said.
