Latest news with #RBA
The Star
an hour ago
- Business
- The Star
RBA seen cutting three more times by early 2026
RBA will take its cash rate to 3.1% in the first quarter of 2026, from 3.85% now, and then pause for a prolonged period, economists say. — Bloomberg MELBOURNE: Economists expect Australia's central bank will deliver three more interest-rate cuts by early 2026, up from two seen previously, bringing their outlook into line with money market pricing. The Reserve Bank of Australia (RBA) will take its cash rate to 3.1% in the first quarter of 2026, from 3.85% now, and then pause for a prolonged period, according to the median estimate of 40 economists in a Bloomberg survey released yesterday. While the RBA's easing cycle has coincided with counterparts from the United Kingdom to Canada and New Zealand, those peers have broadly moved at a faster pace. By contrast, the Federal Reserve has yet to cut this year. Bloomberg Economics anticipates further measured reductions in coming months by most of the 23 central banks in its quarterly guide to the global monetary outlook. Yesterday's poll follows the RBA's surprise decision this month to hold its cash rate steady, defying expectations for a cut. Additionally, minutes of the rate-setting board's July 7 to July 8 meeting released showed policymakers judged that a third reduction in four reviews would conflict with their 'cautious and gradual' easing approach. Luci Ellis, chief economist at Westpac Banking Corp, pointed out that the RBA's preference is for rate reductions that coincide with the release of the staff's quarterly update of macroeconomic forecasts. So a July move 'would have looked a bit like the market pricing forced the cut' said Ellis, who was previously an assistant governor at the RBA. 'The more recent data flow, including on the labour market, makes an August timing even more likely than it did immediately after the July meeting.' Figures last week showed Australian unemployment unexpectedly climbed to a four-year high in June as hiring almost stalled. Still, the 4.3% jobless rate and annual employment growth of 2% were both broadly in line with the RBA's forecasts. That's one reason why some economists, including Bank of America's Nick Stenner who accurately forecast the July pause, see a shallower easing cycle, with just two more cuts to come. Vanguard Investments Australia Ltd's Grant Feng concurs. 'We believe that the disinflation process in Australia will be slow,' Feng said. 'Consequently, the RBA is likely to adopt a cautious stance towards rate cuts, with the pace of easing expected to be gradual throughout the year.' — Bloomberg
ABC News
2 hours ago
- Business
- ABC News
Markets live updates: Tesla quarterly revenue slumps in sharpest fall in a decade, ASX to lift
Electric vehicle maker Tesla misses expectations with its quarterly results, which analysts are labelling disappointing, as its revenue drops 12 per cent, the sharpest decline in more than a decade. The ASX is set to rise following gains on Wall Street, and the local focus will be on a speech by RBA governor Michele Bullock later today. Follow the day's financial news and insights from our specialist business reporters on our live blog. Disclaimer: this blog is not intended as investment advice.
Bloomberg
2 hours ago
- Business
- Bloomberg
How a Central Bank Fumbled Its Communication
Communication has been a basic tool of central banking for decades, but it can be a tricky thing to get right. Merely fronting the microphones doesn't deliver superior results. The message sent has to be clear — and received. The Reserve Bank of Australia needs to do much better. The authority's decision to forgo a widely anticipated interest-rate cut this month left much to be desired, and the RBA's explanations for why it wrong-footed investors have been subpar. Press conferences and the signaling of intent through speeches aren't sidelines. No lesser person than Ben Bernanke, a Nobel laureate and former Federal Reserve chair, observed that successful policy was 98% talk and 2% action.
AU Financial Review
5 hours ago
- Business
- AU Financial Review
ASX to rise, Wall St gains on EU-US trade hopes
Australian shares are set to edge higher, with futures reversing early losses after reports that the EU and US are nearing a trade deal with 15 per cent tariffs as a key component. That tariff level would match one President Donald Trump said the US had reached with Japan the previous evening. The Dow paced gains higher in New York. The S&P 500 and Nasdaq also advanced though investors are waiting for results from Alphabet and Tesla after the closing bell at 6am AEST Thursday. Market highlights ASX futures are pointing up 5 points or 0.1 per cent to 8703. All US prices as of 2.30pm New York time. Today's agenda Among corporate reports expected on Thursday: Fortescue, Coronado Global Resources, Insignia Financial, Karoon Energy, Lynas Rare Earths, Northern Star Resources, Sandfire Resources and Syrah Resources. Macquarie Group will host its annual general meeting, starting at 10.30am at its new headquarters in Sydney. RBA governor Michele Bullock will speak about – The RBA's Dual Mandate - Inflation and Employment – at the Anika Foundation in Sydney at 1.05pm. There will be a raft of manufacturing and services PMI reports released in Japan, France, Germany, the UK, the EU and the US. European Central Bank policymakers gather and are expected to vote to keep rates steady. President Christine Lagarde will host a news conference after the meeting concludes. Top stories PM lifts US beef ban, paves way for Trump tariff talks | The move removes the key excuse used by the White House to impose heavy tariffs on Australian exports, setting the scene for fresh trade negotiations. | In an unusual appearance, former prime minister Scott Morrison told a US House committee that China aimed to use its economic power to challenge the world order. | The probe into alleged bond market manipulation has dragged on for 18 months, and been a source of heightened tension between the bank and the regulator. | The investment banking group was at serious risk of a first strike against its pay report. So CEO Shemara Wikramanayake hit the phones in a move that's surprised investors.
Business Recorder
17 hours ago
- Business
- Business Recorder
Australia, NZ dollars underpinned as trade deals buff sentiment
SYDNEY: The Australian and New Zealand dollars held firm on Wednesday as news of a potential U.S. trade deal with Japan salved risk sentiment, but also lessened some of the uncertainty that has been plaguing the greenback. President Donald Trump said on Tuesday the U.S. and Japan had struck a trade deal that included a 15% tariff, below the 25% threatened, though a lack of detail limited the overall reaction. 'The deals are providing some boost to market sentiment on the grounds that worst case tariff rates have been avoided,' said Shane Oliver, chief economist at AMP. 'That said, the rates so far are way up on levels at the start of the year and still pose the threat of a significant negative impact on U.S. economic growth and global trade disruption.' The reaction in currency markets was cautious, leaving the Aussie a fraction firmer at $0.6562, having bounced 0.5% overnight as the U.S. dollar eased broadly. That put a buffer between last week's low of $0.6454 and refocused attention on the recent eight-month peak of $0.6595. The kiwi dollar held at $0.6006, after rallying almost 0.6% overnight and away from a recent trough of $0.5906. Resistance now lies around $0.6043. There was no domestic data of note, though Australia's statistician did release more details of the upcoming switch to a full monthly consumer price series that could speed up the pace of interest rate changes. Australia is one of the few developed world countries to report CPI quarterly, making it hard for policymakers to read inflation trends in a timely manner. The Reserve Bank of Australia skipped a rate cut this month in large part to wait for a reading on second quarter CPI due on July 30. The steady decision badly wrong-footed markets, an outcome that might well have been avoided if a full monthly CPI had been in place. Indeed, the RBA has a long history of waiting for quarterly CPI readings before changing rates, suggesting the start of the new series in November could accelerate the whole process. The head of the central bank, Michele Bullock, is due to speak on inflation and employment on Thursday and is likely to be asked the importance of the data shift. Markets currently imply a near 100% chance the RBA will cut the 3.85% cash rate at its next meeting in August, and lower it to 3.10% by the end of the year.
