
Australia central bank wary of cutting rates too quickly, prudent to await more data
Minutes of its July 7-8 policy meeting showed the majority of the Reserve Bank of Australia's nine-member board judged rates at 3.85% were still modestly restrictive, but it was difficult to know how far they could be cut before becoming neutral.
"So members observed that it might be prudent to lower interest rates cautiously as the required degree of policy restrictiveness declines," the minutes showed.
The three members that argued for a rate cut judged there was already sufficient evidence that inflation was on track to be sustainably back to target, and there was less need to wait before eaing policy further.
The RBA surprised markets by holding interest rates steady at the meeting in a rare split of six to three, saying the majority of the board wanted to wait for more information including quarterly price data to confirm inflation was slowing.
Traders had wagered heavily on a cut after a monthly inflation report had shown the closely-watched trimmed mean measure hitting a 3-1/2 year low of 2.4% in May. The economy also barely grew in the first quarter as public demand sputtered.
In a nod to market pricing, the RBA said there had been instances in the past where markets had been very confident about the outcome of a policy meeting, but the central bank had acted a different other way.
The RBA said several data indicators had been in line with or even slightly stronger than forecasts, pointing to the benefit of waiting for a little longer.
It noted that even though economic growth was muted in the first quarter, a pick up in private demand was stronger than expected and the labour market had not eased as expected.
It noted monthly inflation could be volatile, and components like housing suggest June quarter inflation could be slightly stronger than expected.
On top of those reasons, the probability of the gloabl economy evolving in line with the most severe downside secario had declined, although the future state of U.S. trade and other policies was unpredictable.
Markets now imply around a 91% chance the RBA will ease again at its next meeting on August 12, after a surprisingly soft jobs report raised concerns that the resilient labour market was finally showing some cracks.
Futures see rates bottoming around 3.10% by early next year.
(Reporting by Stella Qiu; editing by Wayne Cole)
((yifan.qiu@thomsonreuters.com, opens new tab; +61 0 427901124;))
Keywords: AUSTRALIA RBA/MINUTES
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Reuters
11 minutes ago
- Reuters
Malaysia's economy projected to grow 4% to 4.8% this year, central bank says
KUALA LUMPUR, July 28 (Reuters) - Malaysia's economy is projected to expand by 4% to 4.8% in 2025, down from a previous forecast of 4.5% to 5.5%, its central bank said on Monday, warning that trade and tariff uncertainties could affect global growth. Headline inflation is expected to average between 1.5% and 2.3% this year, Bank Negara Malaysia said in a statement. The central bank said the global economic growth outlook was affected by shifting trade policies and uncertainties surrounding tariffs. It said Malaysia's "updated growth projections account for various tariff scenarios, ranging from a continued elevation of tariffs to more favourable trade negotiation outcomes." Although Malaysia's economy remains on a "strong footing", the central bank said its growth projection remains subject to uncertainties surrounding the global economy. Malaysia is facing a 25% tariff on its exports to the United States unless it can reach a deal with Washington by August 1. Malaysia's trade minister said several sticking points remained in the talks with the United States, particularly on non-trade barriers, but discussions were progressing well and were on track to meet the August deadline.


Daily Mail
11 minutes ago
- Daily Mail
How to sell your house privately in Australia and avoid agent commissions
Thousands of Australians are opting to sell their homes themselves in a bid to avoid paying increasingly costly agents fees and commissions. Barry Johnston, aged in his 60s, is among the thousands of Australians who have decided to do away with real estate agents and instead sell their homes privately. Mr Johnston initially engaged with a real estate agent who told him to list his four-bedroom Logan Village, Queensland home at about $1.25million. Having lived in the area for 14 years, he believed his property could fetch $1.42million and decided to privately list it at that value. Within five days, he has secured a 'firm offer' at his listing price and a further offer above asking. 'The agents that have been through here have really undervalued our place, they just wanted to make a quick turnover,' he told Daily Mail Australia. He photographed the property himself and engaged with a third-party website that allowed him to advertise his home on real estate portals for a nominal fee. In all, he estimated the process cost him no more than $2,000 - less than the fee an agent had quoted him for professional photography alone. He said it was 'a lot of work', but said much of it - including readying the property for sale - would have been necessary even with an agent. He expected selling privately will end up saving him about $30,000 in commission and adding up to $150,000 to his closing price. 'In today's economy, that's nothing to be sneezed at,' he said. For Mr Johnston, the question was as simple as: 'Can I justify paying someone so much for something I could do myself?' 'There's just nothing that the real estate agent can do that I can't do, that's basically the crux of it.' Real estate expert Neil Jenman told Daily Mail Australia most homeowners could secure as good or better results than most agents with 'a few hours research'. 'Australian home sellers are bluffed, manipulated, misinformed and terrified into believing they have to use a real estate agent to sell their home,' he said. He claimed Australia's rates of private home sales were among the lowest in the world, while the costs of advertising are the highest of anywhere in the world. 'Most agents don't do anything the sellers couldn't do themselves,' he said. For a flat fee, however, homeowners can pay to advertise on third party sites who, as registered agencies, are allowed to list the ads on property portals like and Domain. Colin Sacks, who runs one such third party site, told Daily Mail Australia said sale enquiries had grown 25 per cent in the past 18 months. 'The number of enquiries I get every day for people who are thinking about this, it's just growing more and more,' he said. 'There's no question... it's just getting busier and busier.' Michael Fotheringham, managing director at Australian Housing and Urban Research Institute agreed third party sites appeared to have increased the rate of private sales. 'It's a minority of sales overall, but there is a strong undercurrent of people who are making a choice not to go through agents and do it themselves,' he said. He said buyers could stand to gain just as much as earners from the shift towards private sales. 'There a three parties involved in a property transfer: the buyer, the seller and the middle man. When you cut out the middle man, there can be a lot of savings.' That said, selling privately won't appeal to homeowners of all kinds. Joanne White recently tried unsuccessfully to sell her commercial property in Stawell, north-west of Melbourne, before engaging a real estate agent. She told Daily Mail Australia selling privately is difficult where 'unique' properties like her own - a converted former residence - are involved. 'I think my biggest issue is, basically, I have a unique property that really, there's not anything else like it in the whole of Australia,' she said. Despite the challenges, Ms White said she would consider selling privately again with a less challenging property. President of the Real Estate Institute of Australia Leanne Pilkington said the work of agents extends well beyond arranging a sale. 'Selling a property is not just about listing it online - it involves legal compliance, understanding market conditions, negotiating with buyers and stakeholders, and managing contracts,' Ms Pilkington told Daily Mail Australia. 'Going private may seem appealing, but it can lead to costly mistakes or delays if the process isn't handled correctly according to legal requirements.'


Times
12 minutes ago
- Times
New Anglo-Australian defence treaty should include more nations
Nuclear-powered submarines are among some of the most complex objects built by man. They require exceptional build quality, such as in the welds used to ensure structural integrity. The skills required are scarce and in high demand, which is why even the United States finds it challenging to launch more than one a year. Together with the US, China, Russia, France and now India, the United Kingdom is a member of the small club of nations capable of producing these deadly prowlers of the ocean depths, the presence of which can send lesser navies scurrying for port. However, the immense cost of these vessels, the capital ships of the modern era, means that it is difficult to maintain a steady drumbeat of production. Gaps in orders can result in the running down of supply chains and an exodus of trained workers. That is why the signing this weekend of the 50-year Geelong treaty between the UK and Australia is so important. The agreement covers the construction in Barrow-in-Furness and Adelaide of a new class of hunter-killer sub (SSN), nuclear powered but conventionally armed. Britain is looking to build 12 in a move that would take the Royal Navy back to its Cold War strength. Australia may build half a dozen. Good news for Barrow, home to Britain's only nuclear yard, and Rolls Royce in Derby, where submarine reactors are made. Some 7,000 jobs will be created at Barrow and in the supply chain; the export of components to Australia will earn £20 billion over 25 years. There is, however, uncertainty hanging over the deal. Geelong is a subsidiary part of the Aukus agreement involving the US, UK and Australia. The idea is for the Americans to sell Australia three to five off-the-shelf SSNs to serve as a stop-gap before the arrival of its home-built subs in the 2040s. But Aukus, a child of the Biden era, is now in danger of falling victim to the Trump administration's 'America first' policy. There is fear in Washington that the loss of the subs would seriously undermine the US Navy's ability to defend Taiwan from invasion by China. This wavering American commitment to Aukus is further evidence of the need for US allies to future-proof their armed forces against its increasingly mercurial security policy. That means not being overly reliant on the US for equipment. Britain is already cooperating with Italy and Japan on the Tempest combat aircraft project, and growing closer to France and Germany in the nuclear and conventional fields. Geelong suggests another, complementary route: the rebuilding of Britain's defence-industrial ties with its most trusted friends in a 'Canzuk' alliance of Canada, Australia, the UK and New Zealand. These countries have gone their own way on trade, with old Commonwealth patterns of commerce replaced by regional ones, but they can all benefit from economies of scale. Together, Canzuk has a joint GDP that is fourth behind China, the US and the European Union. That promises economies of scale in defence procurement without the overweening influence of the US. The Canzuk concept joins together nations with shared histories and values. Trade may have declined, but not trust. The four are already partners in the Five Eyes intelligence alliance and can do a lot more to strengthen mutual security. In this uncertain world, where authoritarian powers threaten the international order and the US insurance policy is expiring, old ties can be put to new uses.