Latest news with #DavidBassanese
Perth Now
5 days ago
- Business
- Perth Now
Aussie shares surge as jobless rise spurs rate cut hope
The Australian sharemarket has jumped after the unemployment rate ticked up to 4.3 per cent, increasing the odds of an interest rate cut in September. Near midday on Thursday, the benchmark S&P/ASX200 index was up 63.3 points to 8,624.9, a gain of 0.74 per cent, while the broader All Ordinaries had gained 59 points, or 0.66 per cent, to 8,862.1. June labour force data released by the Australian Bureau of Statistics showed employment increased by 2,000 jobs, while the unemployment rate rose to 4.3 per cent. Consensus predictions were for 20,000 jobs to be created, and the jobless rate to stay at 4.1 per cent. The RBA will likely cut interest rates in September following the result, AMP chief economist Shane Oliver told ABC News. "For those looking for a black cat you get a ticket in terms of the jobs number because they were on a soft side," he said on Thursday. "Softer jobs growth for a couple of months in a row, that is pointing to a cut coming in. Today's results will just add to expectations by money market traders and economists that we will get a cut in August. It has reinforced those expectations." Betashares chief economist David Bassanese said an August rate cut would be a "slam dunk" unless second-quarter inflation data is higher than expected. The Australian share market, which was already back in the green after one of its worst sessions since in early May on Wednesday, surged following the release of the jobs report. The Australian dollar meanwhile dropped to a 23-day low, trading for 64.78 US cents, from 65.25 US cents at close of business on Wednesday. In the US overnight, US President Donald Trump retreated from talk of firing Federal Reserve chair Jerome Powell. Wall Street rocked as the story unfolded but bounced back by the market's close, with the S&P500 finishing up 0.3 per cent. Every ASX sector was in the green at midday, with property the biggest gainer, rising 1.2 per cent. Goodman Group had added 1.2 per cent and Scentre Group had climbed 1.6 per cent. Miners also rebounded with 16 of the top 20 stocks back in the green, including BHP's 0.56 per cent gain, Rio Tinto rising 0.98 per cent and Fortescue up by 0.5 per cent. Superfund Australian Ethical was up 3.2 per cent after the investment management company announced it had delivered 34 per cent growth in funds under management, to a record high of $13.94 billion. All the big four banks had also gained, with both the CBA and Westpac up 1.2 per cent, NAB climbing 0.86 per cent and ANZ rising 0.75 per cent. Shares in Carsales' parent company, CAR Group, took a 2.3 per cent hit after CEO Cameron McIntyre stood down following a nine-year tenure in the top job. The Australian dollar was trading for 64.78 US cents, from 65.25 US cents.
News.com.au
5 days ago
- Business
- News.com.au
Employment rises by 2,000 but jobless rate jumps, sending Aussie dollar plunging
The Australian dollar has slumped and the money markets are calling a 100 per cent chance of a rate cut after new data revealed a shock fall in the employment rate. The unemployment rate rose to 4.3 per cent last month, beating market expectations of 4.1 per cent, according to the Australian Bureau of Statistics. Employment as a whole rose by 2000 people this month, following a fall of 1000 in May, and is up 2 per cent year on year. The rise in unemployment was determined as 33,600 workers became unemployed in June. This was against expectations of 20,000 jobs to be added in the month and the unemployment rate to hold. Markets immediately jumped on the news, with investors now banking on a future rate cut. With expectations of lower rates, the Australian dollar slumped back below 65 US cents, while Australia's sharemarket jumped on the news. IG market analyst Tony Sycamore said the bond market was quick to react to Thursday's data, moving up expectations of a rate cut from 80 to 100 per cent in August. 'Today's rise in the unemployment rate pushes it above the RBA's forecast of 4.2 per cent for June 2025 and meets the 4.3 per cent rate the RBA expected by year-end,' he said. 'Combined with last month's fall in employment, there are clear signs of deceleration emerging in the labour market. 'This calls into question the RBA's decision to prioritise inflation over growth and jobs at its board meeting earlier this month. Betashare chief economist David Bassanese, who called a hold in July, said Thursday's unemployment data was a 'slam dunk' for an August rate cut. 'We'll need more consistent signs of weakness in both employment and hiring indicators before we can conclude the labour market is turning,' he wrote in an economic note. 'That said, today's result clearly adds to the case for a RBA rate cut at the August policy meeting provided next week's Q2 CPI report is not a shocker.' With the unemployment rate lurching higher, growth at subpar levels, and inflation back within the RBA's target band, the RBA will no doubt be keen to make amends at its meeting in August. The underemployment rate also increased to 6 per cent, as 40,200 part-time roles were created and 38,200 full-time roles were lost from the job market. The employment-to-population ratio remained at 64.2 per cent, and the participation rate, being people who are actively working, rose to 67.1 per cent. Hours worked fell 0.9 per cent in June, following a rise of 1.4 per cent in May. ABS head of labour statistics Sean Crick said: 'This month we saw a decrease in full-time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full-time employees.' Prior to Thursday's figures, experts had tipped the unemployment rate to remain at 4.1 per cent, although they did predict a tightening of the jobs market. The Reserve Bank of Australia will be watching the jobless rate ahead of its next meeting, having the dual mandate of employment and controlling inflation. 'I think the focus for the RBA will be ensuring the labour market remains healthy going forward,' NAB's head of Australian economics Gareth Spence said. 'The timing of cuts is not super important. 'It's more about where do they end up.' In a move that shocked markets and disappointed homeowners, the RBA kept the official cash rate at 3.85 per cent during its July 8 meeting.
Perth Now
08-07-2025
- Business
- Perth Now
Shock blow for Aussie mortgage holders
Australian households will have to wait a little longer for more mortgage relief, with slowing inflation and weak retail sales not enough to sway the central bank that the fight against cost of living is over. A cautious RBA has held the official cash rate at 3.85 per cent following its July meeting, with the shock move defying expert commentators and the money markets predictions. Prior to Tuesday's announcement, the money market had placed a 92 per cent chance on a rate cut off the back of weaker than expected economic data. Mortgage holders will now have to wait until August at the earliest to get further interest rate relief. RBA governor Michele Bullock announced interest rates would remain on hold. NewsWire / Nikki Short Credit: News Corp Australia The Reserve Bank board said while inflation is falling the board wanted to wait for a 'little more information' before moving on rates. 'Uncertainty in the world economy remains elevated,' the board wrote in its statement. 'While the final scope of US tariffs and policy responses in other countries remains unknown, financial market prices have rebounded with an expectation that the most extreme outcomes are likely to be avoided.' The board also said domestic factors played a role in their decision, including a gradual recovery in household incomes and an easing in some measures of financial stress. 'There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments,' the board said. Tuesday's announcement follows a rate cut in May, with the central bank opting against back-to-back movements in the official cash rate. Australia's Cash Rate 2022 VanEck head of investments and capital markets Russel Chesler said markets were getting ahead of themselves and changes to monetary policy takes time to unwind. 'Markets seem to be throwing caution to the wind with their expectation of two more cuts this year, implying further falls in inflation and a softer job market,' he said 'The unemployment rate has remained steady at 4.1 per cent, which is close to historical lows, and there are no signs of this changing.' Ahead of the announcement, Betashare chief economist David Bassanese said the 'case for a rate cut had not been established.' 'Although May trimmed mean annual inflation dropped to 2.4 per cent, this followed a solid 2.8 per cent gain in April – and there's every risk it could bounce back again in the more comprehensive and reliable June quarter CPI report later this month,' he said. David Bassanese said weak retail sales only gave the RBA a yellow light for a rate cut. Credit: News Corp Australia, NewsWire/ Monique Harmer 'Prudence suggests the RBA should and would await confirmation of lower inflation in the quarterly CPI report before cutting again in August – despite the market pricing a rate cut next week with near certainty.' But he conceded last Wednesday's retail data gave the RBA a yellow light when it comes to making a rate call. 'Accordingly, although retail sales rose a weaker than expected 0.2 per cent in May, it does not necessarily give the green light to the RBA to cut interest rates next week,' he said.
West Australian
08-07-2025
- Business
- West Australian
‘Case not established': Shock blow as RBA keeps rates on hold in July meeting
Australian households will have to wait a little longer for more mortgage relief, with slowing inflation and weak retail sales not enough to sway the central bank that the fight against cost of living is over. A cautious RBA has held the official cash rate at 3.85 per cent following its July meeting, with the shock move defying expert commentators and the money markets predictions. Prior to Tuesday's announcement, the money market had placed a 92 per cent chance on a rate cut off the back of weaker than expected economic data. Mortgage holders will now have to wait until August at the earliest to get further interest rate relief. The Reserve Bank board said while inflation is falling the board wanted to wait for a 'little more information' before moving on rates. 'Uncertainty in the world economy remains elevated,' the board wrote in its statement. 'While the final scope of US tariffs and policy responses in other countries remains unknown, financial market prices have rebounded with an expectation that the most extreme outcomes are likely to be avoided.' The board also said domestic factors played a role in their decision, including a gradual recovery in household incomes and an easing in some measures of financial stress. 'There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments,' the board said. Tuesday's announcement follows a rate cut in May, with the central bank opting against back-to-back movements in the official cash rate. Australia's Cash Rate 2022 VanEck head of investments and capital markets Russel Chesler said markets were getting ahead of themselves and changes to monetary policy takes time to unwind. 'Markets seem to be throwing caution to the wind with their expectation of two more cuts this year, implying further falls in inflation and a softer job market,' he said 'The unemployment rate has remained steady at 4.1 per cent, which is close to historical lows, and there are no signs of this changing.' Ahead of the announcement, Betashare chief economist David Bassanese said the 'case for a rate cut had not been established.' 'Although May trimmed mean annual inflation dropped to 2.4 per cent, this followed a solid 2.8 per cent gain in April – and there's every risk it could bounce back again in the more comprehensive and reliable June quarter CPI report later this month,' he said. 'Prudence suggests the RBA should and would await confirmation of lower inflation in the quarterly CPI report before cutting again in August – despite the market pricing a rate cut next week with near certainty.' But he conceded last Wednesday's retail data gave the RBA a yellow light when it comes to making a rate call. 'Accordingly, although retail sales rose a weaker than expected 0.2 per cent in May, it does not necessarily give the green light to the RBA to cut interest rates next week,' he said.
News.com.au
08-07-2025
- Business
- News.com.au
‘Case not established': Shock blow as RBA keeps rates on hold in July meeting
Australian households will have to wait a little longer for more mortgage relief, with slowing inflation and weak retail sales not enough to sway the central bank that the fight against cost of living is over. A cautious RBA has held the official cash rate at 3.85 per cent following its July meeting, with the shock move defying expert commentators and the money markets predictions. Prior to Tuesday's announcement, the money market had placed a 92 per cent chance on a rate cut off the back of weaker than expected economic data. Mortgage holders will now have to wait until August at the earliest to get further interest rate relief. Tuesday's annoucement follows a rate cut in May, with the central bank opting against back-to-back movements in the official cash rate. Ahead of the announcement, Betashare chief economist David Bassanese said the 'case for a rate cut had not been established.' 'Although May trimmed mean annual inflation dropped to 2.4 per cent, this followed a solid 2.8 per cent gain in April - and there's every risk it could bounce back again in the more comprehensive and reliable June quarter CPI report later this month,' he said. 'Prudence suggests the RBA should and would await confirmation of lower inflation in the quarterly CPI report before cutting again in August - despite the market pricing a rate cut next week with near certainty.' But he conceded last Wednesday's retail data gave the RBA a yellow light when it comes to making a rate call. 'Accordingly, although retail sales rose a weaker than expected 0.2 per cent in May, it does not necessarily give the green light to the RBA to cut interest rates next week,' he said.
