Latest news with #RusselChesler
Yahoo
08-07-2025
- Business
- Yahoo
ASX flat despite RBA's shock move
Australia's sharemarket closed flat on Tuesday despite the Reserve Bank shocking markets by holding the official cash rate at 3.85 per cent and more details emerging from Donald Trump's tariff plans. The benchmark ASX 200 index closed at 8590.7 just 1.4 points higher, or 0.02 per cent, on a seesawing day of trading. The broader All Ordinaries also eked out a tiny gain, up 2.30 points or 0.03 per cent. The Australian dollar jumped on higher interest rates and is now buying 65.33 US cents. On a mixed day of trading, just four sectors were higher, with seven finishing in the red. The gains were led by telecommunications, the major banks and consumer discretionary stocks. Three of the big four banks finished higher with CBA gaining 0.83 per cent to close at $179.28, NAB gained 0.64 per cent to $39.29 and ANZ finished in the green up 0.27 per cent to $30.21. Westpac was the outlier, slipping just 0.03 per cent to $33.47 to be the only major bank to end in the red. Wesfarmers gained 0.53 per cent to $83.49, Aristocrat Leisure gained 0.30 per cent to $67.84 and Eagers Automotive jumped 0.64 per cent to $18.73. Going against market expectations, the RBA held the official cash rate at 3.85 per cent, although left the door open for future rate cuts. VanEck head of investments and capital markets Russel Chesler said markets seemed to be throwing caution to the wind with their expectations. 'A rate cut is generally good for markets, as it reduces the cost of capital and thus encourages business growth – particularly for small caps, which are typically more leveraged,' he said. 'The additional rate easing, while mild, also suggests business input costs should improve, which is beneficial for mid and small caps that tend to have lower pricing power. 'However, the tight labour market should not be overlooked, with wages continuing to put downward pressure on profits.' Australia's market followed a weak lead in from Wall Street overnight after US President Donald Trump began sending letters to key trading partners, including Japan and South Korea who will both face 25 per cent tariff rates. In total 14 letters were sent with Mr Trump sharing screenshots of signed form letters dictating new tariff rates to the leaders of Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos, Myanmar, Tunisia, Bosnia and Herzegovina, Indonesia, Bangladesh, Serbia, Cambodia and Thailand. senior financial market analyst Kyle Rodda called it a 'quick punch in the guts' as the July 9 US trade deal deadline approaches. 'Market participants were anticipating a flurry of trade deals with some trading partners and a handful of letters announcing new tariff rates on others,' he wrote in an economic note. 'So far, only the letters have been published, and their contents made investors' stomachs sink.' In company news, shares in DigitalX soared 34.15 per cent to $0.11 after the digital asset manager announced a $20.7m strategic investment to expand its bitcoin-focused strategy. Pizza maker Domino's also finished in the green up 2.39 per cent to $18.45 after broker Morgans revealed a buy rating for the business stating 'we think the risk reward looks attractive from here.' It comes after shares have fallen by 47 per cent over the last 12 months, including a more than 11 per cent drop last week after chief executive Mark Van Dyck announced plans to leave his role just before Christmas. Anti-drone technology company DroneShield also jumped 4.07 per cent to $2.56 after telling the market it had been awarded an $11.7m follow-on research and development contract by a Five Eyes Department of Defence. This follows the completion of a $9.9m contract with the same defence customer back in July 2023.
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.
