Peek into surprise RBA decision as rate cut on cards
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Perth Now
an hour ago
- Perth Now
Iran, EU hold 'frank' nuclear talks, as sanctions loom
Tehran says it will continue nuclear talks with European powers after "serious, frank, and detailed" conversations, the first such face-to-face meeting since Israel and the US bombed Iran last month. Before the meeting in Istanbul, Iran also pushed back on suggestions of extending the United Nations resolution that ratifies a 2015 deal, nearing expiry, that was designed to curb its nuclear program. Delegations from the European Union and so-called E3 group of France, Britain and Germany met Iranian counterparts for about four hours at Iran's consulate for talks that the UN nuclear watchdog said could provide an opening to resume inspections in Iran. Iranian Deputy Foreign Minister Kazem Gharibabadi said afterwards that both sides had presented specific ideas on sanctions relief and the nuclear issue. "While seriously criticising their stances regarding the recent war of aggression against our people, we explained our principled positions, including on the so-called snapback mechanism," he said. "It was agreed that consultations on this matter will continue." The European countries, along with China and Russia, are the remaining parties to the 2015 deal, from which the US withdrew in 2018. It lifted sanctions on Iran in return for restrictions on its nuclear program. A deadline of October 18 is fast approaching, when the resolution governing that deal expires. At that point, all UN sanctions on Iran will be lifted unless the "snapback" mechanism is triggered at least 30 days before. This would automatically reimpose those sanctions, which target sectors from hydrocarbons to banking and defence. To give time for this to happen, the E3 have set a deadline of the end of August to revive diplomacy. Diplomats say they want Iran to take concrete steps to convince them to extend the deadline by up to six months. Iran would need to make commitments on key issues, including eventual talks with Washington, full cooperation with the UN's International Atomic Energy Agency (IAEA), and accounting for 400 kilograms of near-weapons-grade highly enriched uranium, whose whereabouts are unknown since last month's strikes. Before the talks, an Iranian foreign ministry spokesperson had said Tehran considered talk of extending UN Security Council Resolution 2231 to be "meaningless and baseless". IAEA head Rafael Grossi said he was optimistic that nuclear inspection visits might be able to restart this year and that it was important to discuss the technical details now. "We need to agree on where to go, how to do it. We need to listen to Iran in terms of what they consider should be the precautions to be taken," he told reporters in Singapore. The United States held five rounds of talks with Iran before its air strikes in June, which US President Donald Trump said had "obliterated" a program that Washington and its ally Israel say is aimed at acquiring a nuclear bomb. However, NBC News has cited current and former US officials as saying a subsequent US assessment found that while the strikes destroyed most of one of three targeted nuclear sites, the other two were not as badly damaged. Iran denies seeking a nuclear weapon and says its program is meant solely for civilian purposes.
West Australian
an hour ago
- West Australian
Iran, EU hold 'frank' nuclear talks, as sanctions loom
Tehran says it will continue nuclear talks with European powers after "serious, frank, and detailed" conversations, the first such face-to-face meeting since Israel and the US bombed Iran last month. Before the meeting in Istanbul, Iran also pushed back on suggestions of extending the United Nations resolution that ratifies a 2015 deal, nearing expiry, that was designed to curb its nuclear program. Delegations from the European Union and so-called E3 group of France, Britain and Germany met Iranian counterparts for about four hours at Iran's consulate for talks that the UN nuclear watchdog said could provide an opening to resume inspections in Iran. Iranian Deputy Foreign Minister Kazem Gharibabadi said afterwards that both sides had presented specific ideas on sanctions relief and the nuclear issue. "While seriously criticising their stances regarding the recent war of aggression against our people, we explained our principled positions, including on the so-called snapback mechanism," he said. "It was agreed that consultations on this matter will continue." The European countries, along with China and Russia, are the remaining parties to the 2015 deal, from which the US withdrew in 2018. It lifted sanctions on Iran in return for restrictions on its nuclear program. A deadline of October 18 is fast approaching, when the resolution governing that deal expires. At that point, all UN sanctions on Iran will be lifted unless the "snapback" mechanism is triggered at least 30 days before. This would automatically reimpose those sanctions, which target sectors from hydrocarbons to banking and defence. To give time for this to happen, the E3 have set a deadline of the end of August to revive diplomacy. Diplomats say they want Iran to take concrete steps to convince them to extend the deadline by up to six months. Iran would need to make commitments on key issues, including eventual talks with Washington, full cooperation with the UN's International Atomic Energy Agency (IAEA), and accounting for 400 kilograms of near-weapons-grade highly enriched uranium, whose whereabouts are unknown since last month's strikes. Before the talks, an Iranian foreign ministry spokesperson had said Tehran considered talk of extending UN Security Council Resolution 2231 to be "meaningless and baseless". IAEA head Rafael Grossi said he was optimistic that nuclear inspection visits might be able to restart this year and that it was important to discuss the technical details now. "We need to agree on where to go, how to do it. We need to listen to Iran in terms of what they consider should be the precautions to be taken," he told reporters in Singapore. The United States held five rounds of talks with Iran before its air strikes in June, which US President Donald Trump said had "obliterated" a program that Washington and its ally Israel say is aimed at acquiring a nuclear bomb. However, NBC News has cited current and former US officials as saying a subsequent US assessment found that while the strikes destroyed most of one of three targeted nuclear sites, the other two were not as badly damaged. Iran denies seeking a nuclear weapon and says its program is meant solely for civilian purposes.
Perth Now
an hour ago
- Perth Now
Wall Street inches up amid Trump EU trade remarks
The S&P 500 and the Dow edged up in tepid trading as investors assessed President Donald Trump's latest comments on trade discussions with the European Union and his hints that a rate cut from the US Federal Reserve was imminent. Trump said the odds of a US-EU trade deal were "50-50" and suggested after a meeting with Fed Chair Jerome Powell that a rate cut might be on the horizon. A spate of upbeat second-quarter earnings also supported Wall Street's record run. In early trading on Friday, the Dow Jones Industrial Average rose 70.76 points, or 0.16 per cent, to 44,764.67 - creeping up towards its December 4 record high. The S&P 500 added 10.70 points, or 0.17 per cent, to 6,374.05, and the Nasdaq Composite gained 1.87 points, or 0.01 per cent, to 21,059.83. Expectations were rife that the European bloc would soon sign an agreement with Washington. Meanwhile, US negotiations with South Korea gathered momentum ahead of the August 1 deadline set for most countries as they scrambled to avoid Trump's steep import levies. A wave of trade agreements including pacts with Japan, Indonesia and the Philippines set all three major indexes on track for a strong weekly finish, if the gains hold. Tariffs have had only a small impact on inflation and the economy has not shown many negative effects from shifts in trade policy, according to Paul Ashworth, chief North America economist at Capital Economics. Because of this, he said, even a slight increase in inflation would likely be enough to keep the Fed from cutting rates again. Of the 168 companies in the S&P 500 that have reported earnings as of Friday, 79.8 per cent beat analyst expectations, according to data compiled by LSEG. However, there were a few setbacks during the week. Heavyweights Tesla and General Motors stumbled and were on track for their steepest weekly declines in nearly two months if losses hold. Tesla CEO Elon Musk warned of tougher quarters ahead amid shrinking US EV subsidies, while General Motors took a hit after absorbing a $US1.1-billion ($A1.7 billion) blow in its second-quarter earnings from Trump's tariffs. Intel dropped 9.0 per cent after the chipmaker forecast steeper third-quarter losses than the Street expected and announced plans to slash jobs. All eyes will be on the US Federal Reserve's monetary policy meeting next week, with bets indicating that policymakers are likely to keep interest rates unchanged as they evaluate the impact of tariffs on inflation. The central bank is under immense scrutiny from the White House, with President Trump leading a censure campaign against Chair Jerome Powell for not reducing borrowing costs, while often hinting that he would sack the top policymaker. In a surprise move, Trump escalated the pressure by making a rare visit to the Fed headquarters on Thursday, where he criticised its $US2.5-billion ($A3.8 billion) renovation project. According to CME's FedWatch tool, traders now see a nearly 61.8 per cent chance of a rate cut as soon as September. Among other stocks, Newmont added 7.4 per cent after the gold miner surpassed Wall Street expectations for second-quarter profit. Health insurer Centene posted a surprise quarterly loss, but its shares gained 3.0 per cent. Paramount Global rose 2.1 per cent after US regulators approved its $US8.4 billion ($A12.8 billion) merger with Skydance Media.
