Latest news with #MicheleBullock
Business Recorder
9 hours ago
- Business
- Business Recorder
New Zealand dollar falls as benign inflation boosts rate cut bets
SYDNEY: The New Zealand dollar slipped on Monday while local bonds rallied after inflation data proved not as bad as feared, with still tepid domestic price pressures adding to the case for a cut in interest rates next month. The kiwi dollar fell 0.3% to $0.5941, having lost 0.8% last week to mark a third consecutive week of declines. It is now off almost 3% from a nine-month peak of $0.6120, with near-term support now at last week's low of $0.5906. Data on Monday showed New Zealand's inflation picked up to an annual rate of 2.7% in the second quarter, the highest level in a year, thanks to higher food, electricity and streaming services prices. However, that came under the forecast of 2.8%. Non-tradable inflation, mostly domestically generated price pressures, continued to slow to 3.7% from 4% previously. 'CPI inflation has failed to significantly increase, providing the (Reserve Bank of New Zealand's Monetary Policy Committee) with reason not to expect a return of yearly CPI back to the top of the target band (of 1-3%) this year,' said Citi analysts in a note to clients. 'This would allow the MPC to re-start the easing cycle at the August 20 meeting.' Two-year swap rates duly fell 6 basis points to 3.115%, the lowest since mid-May. Ten-year government bond yields dropped 4 bps to 4.595%. Markets are now pricing in a 75% probability the RBNZ will cut by 25 basis points in August, up from a 61% chance ahead of the data. The Aussie, on the other hand, was flat at $0.6510 , having lost 1% last week to as low as $0.6455. It is finding some support at 65 cents. Against the Japanese yen, it slipped 0.3% to 96.61 yen as the Japanese currency bounced a little after the ruling coalition lost control of the upper house in an election on Sunday, a result that has been well flagged by polls. Looking ahead, the Reserve Bank of Australia will release the minutes of its July policy meeting where it may offer some insights into a rare split among policymakers before deciding to hold rates steady at 3.85%. A surprisingly soft jobs report last week has seen markets move to price a 90% chance that the RBA will cut rates in August. Governor Michele Bullock is due to give a speech at an annual fundraising lunch at the Anika Foundation on Thursday. Across the Tasman Sea, RBNZ Chief Economist Paul Conway will be speaking about the economic effects of tariffs in New Zealand on Thursday at 11:30am local time.
Yahoo
16 hours ago
- Business
- Yahoo
Major change that could impact future RBA interest rate decisions
The Reserve Bank of Australia (RBA) will reportedly soon get comprehensive monthly insight into inflation pressures, and it could mean it moves on key interest rate decisions earlier. The central bank defied expectations by holding the cash rate this month, with RBA Governor Michele Bullock noting issues around the current monthly inflation report were a key reason behind the decision. The Australian Bureau of Statistics (ABS) releases monthly and quarterly inflation data. The quarterly CPI data is comprehensive and captures changes in prices for all goods and services. It is what the RBA and Treasury use to make forecasts, and the RBA is holding out for quarterly data before making another interest rate decision in August. The monthly CPI data isn't as comprehensive because it only includes up-to-date price information for 66 to 77 per cent of the CPI basket each month. Each month has different components in it, and the trimmed mean inflation isn't calculated the same way as quarterly. RELATED NAB, ANZ slash interest rates as lenders move despite RBA cash rate hold Common neighbour problem plaguing Aussie houses Compensation sought for millions of Qantas customers From November 26, the Sydney Morning Herald reports the ABS will release a fully formed monthly inflation report. This will bring Australia in line with all but one OECD nation. The May monthly CPI indicator showed headline inflation at 2.1 per cent and trimmed mean inflation at 2.4 per cent. In comparison, the March quarterly CPI indicator showed inflation at 2.4 per cent and trimmed mean inflation at 2.9 per cent, falling within the RBA's 2 to 3 per cent target band. The ABS will reportedly receive $156.7 million to compile data and rebuild its IT systems before moving to a full monthly inflation report. The extra funding will allow it to collect data every month on the expenditure classes not currently captured by the monthly figures, the Sydney Morning Herald reports. It will continue to release the quarterly inflation report for at least the next 18 waiting for inflation data to move on rates Following the RBA's decision this month, Bullock emphasised the board viewed the quarterly CPI as the most comprehensive inflation reading. 'This, of course, is our problem because we only get four readings a year,' she said. 'And it is very difficult, I have said this before — it is very difficult on four readings a year to get an idea of momentum of inflation. 'Other countries have full CPIs every month, and a much better idea about the momentum of inflation coming from that. 'So that's why, and I think the board in its decision has been cautious, careful and it is trying to make sure that it gets this right. This has paid off well for us.' Bullock noted the May monthly inflation reading was 'a little too volatile and not quite representative of what's really going on with inflation'. Bullock said the board had decided to wait to confirm with the next full quarterly CPI data, due July 30, that inflation was still on track. 'We'll reconsider again in August with this extra information and new forecasts, and that will allow us to decide whether or not we're still on track for continuing to ease,' she said. All of the Big Four banks are expecting the RBA will cut interest rates in August, with the recent unemployment data further paving the way for a rate cut. The unemployment rate rose 4.3 per cent in June, up from 4.1 per cent in May. Employment increased by 2,000 people during the month, but the number of officially unemployed people jumped by 33,600.
AU Financial Review
18 hours ago
- Business
- AU Financial Review
ASX futures down after record week
Australian shares are expected to open lower on Monday, with futures pointing to a 0.4 per cent drop for the S&P/ASX 200, trimming some of last week's 2.1 per cent gain – the local market's strongest weekly performance since May. Wall Street ended mixed on Friday as earnings results disappointed and concerns grew over Donald Trump's push for new tariffs on European goods. The Dow fell 142 points, while the S&P 500 was flat and the Nasdaq edged higher. Back home, attention turns to the Reserve Bank of Australia, with Tuesday's meeting minutes and a Thursday speech from governor Michele Bullock set to shape expectations ahead of the August board meeting. Markets had been pricing in a rate cut this month, but were caught off guard when the RBA held steady at 3.85 per cent. A jump in the unemployment rate, from 4.1 to 4.3 per cent, has since added weight to the case for easing. 'If markets can get their head around the fact that a rate cut is more likely than not, and Michele Bullock is seen to keep the door open to that this week, then markets may well continue on their merry way,' said Stephen Miller, an investment strategy adviser at GSFM. This week's agenda Minutes from the RBA's shock decision to hold rates at 3.85 per cent will be released on Tuesday, before Bullock delivers a major speech in Sydney on Thursday. A string of results from US companies will be announced this week including those from Alphabet, Tesla, Honeywell, Lockheed Martin, Northrop Grumman and General Motors. Locally, company earnings will be released from the likes of AMP, Woodside Energy, Fortescue and Whitehaven.
AU Financial Review
2 days ago
- Business
- AU Financial Review
ASX to fall, but week hinges on RBA speech and Wall Street earnings
The ASX is poised to open lower, but investors hope a dovish sentiment in Reserve Bank of Australia minutes and a speech from governor Michele Bullock will lock in a rate cut next month and drive markets higher. The local stockmarket's performance will also be heavily influenced by a string of results from major global companies including Alphabet and Tesla, which will set the direction of Wall Street and drive Australian shares.
The Advertiser
2 days ago
- Business
- 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.
