ASX 200 rises as fresh data shows inflation falls into RBA's target range, could prompt second rate cut in 2025
The index bumped up 0.2 per cent on Wednesday, with Ramelius Resources rising 3.7 per cent and Spartan Resources jumping three per cent.
Australian stocks have been on a tear over the past week, rising by 3.2 per cent over the past five days.
Headline inflation remains stable at 2.4 per cent, but trimmed mean inflation - down from 3.3 per cent to 2.9 per cent - has fallen into the central bank's target range for the first time since 2021.
The new figures have sparked hope that the RBA is about to make its second interest rate cut of the year.
Sky News Business Reporter Ed Boyd said lowering inflation could lead to a boost in market confidence.
'Inflation numbers today could have an impact on the market,' Boyd said.
'If they're pretty good, the markets should lift even more.'
On Wall Street, all major indexes surged despite US employers posting 7.2 million jobs vacancies in March, below the 7.5 million forecast by economists.
The Nasdaq rose 0.6 per cent, the Dow Jones increased 0.8 per cent and the S&P 500 jumped 0.6 per cent.
Hopes of the ongoing trade war simmering have surged on the back of US President Donald Trump telling reporters tariff negotiations with India are 'coming along great' and predicting there will be a deal between the two major countries.
'I think we'll have a deal with India,' Trump said outside the White House.
'The prime minister, as you know, was here three weeks ago, and they want to make a deal.'
US treasury secretary Scott Bessent echoed Trump's comments, telling reporters the US was 'very close on India'.
The US President said he was in discussions with Anthony Albanese on tariff discussions after speculation grew on whether the Prime Minister can get in contact with Trump.
'They are calling, and I will be talking to him, yes,' Trump told Nine News.
The NZX 50 Index rose about 0.4 per cent on Wednesday before more than undoing these gains and sitting down 0.1 per cent.
After Japan pausing trading on Tuesday for Showa Day, Japan's Nikkei 225 spiked almost half a per cent before losing its gains.
South Korea's KOSPI is up about 0.1 per cent.
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Perth Now
29 minutes ago
- Perth Now
How low can they go? Growth and jobs to rule rates call
With a highly-anticipated Reserve Bank interest rate cut in the bag, the prospect of more mortgage relief in September is looking less secure. After the central bank cut the cash rate by a quarter percentage to 3.6 per cent on Tuesday, Governor Michele Bullock raised hopes of more rate reductions to come. While she wouldn't specifically state where the cash rate would end up when all is said and done, Ms Bullock indicated more cuts would be consistent with the RBA meeting its targets of low inflation and full employment. The bank's quarterly economic forecasts, also released on Tuesday, assumed two more cuts, based on market pricing. "You'll note that in the forecasts, we have inflation coming back down to target and the unemployment rate remaining where it is with a couple more cash rate cuts in there," Ms Bullock said. "That's the best sort of guess, but things can change." Money markets continued to price in two more cuts by early 2026, following the decision. But traders were less hopeful that the RBA would deliver another cut at its next meeting in September, pricing in about a one-third chance. Ms Bullock said the board would take things "meeting-by-meeting", keeping a close eye on upcoming data releases to ensure the economy continues to progress in line with the RBA's aims. CBA senior economist Belinda Allen expects the RBA to wait until November before cutting again, but that could shift depending on how the data unfolds. "The governor did not rule out back‑to‑back cuts. Inflation appears under control, so any acceleration of the cutting cycle we expect would have to be driven by a deterioration in the labour market," she said. Ms Allen said the most important data readings before the next meeting would be labour force surveys released on Thursday and in September, as well as economic growth figures for the June quarter to be released on September 3. RBA staff lowered their GDP growth forecasts as they pared back their expectations for trend productivity growth from one per cent to 0.7 per cent per year. Australia's economy is now expected to expand by 1.7 per cent - down from 2.1 per cent - in 2025. While the uncertainty caused by Donald Trump's trade war had eased, there remained risks to growth. "Recent international developments have so far had little discernible impact on the Australian economy," the RBA's Statement on Monetary Policy said. But given the typical lag, any discernible effects were only expected to start showing up in the second half of 2025 or 2026. While labour force figures are key to the RBA's assessment of the tightness of the jobs market, the bank will keep an eye on wage growth data on Wednesday to confirm low unemployment isn't contributing to an unsustainable rise in wages.
Perth Now
3 hours ago
- Perth Now
Wall Street gains on moderate US inflation data
Wall Street's main indexes have inched higher after data showed inflation rose broadly in line with expectations in July, putting the Federal Reserve on track to lower interest rates next month. A US Labor Department report showed that the Consumer Price Index (CPI) rose by an expected 0.2 per cent on a monthly basis in July while on an annual basis it was a touch lower than what economists were projecting, drawing calls from President Donald Trump to lower interest rates. However limiting the optimism, the data suggested that underlying inflation rose by 3.1 per cent in the previous month as markets look for signs that tariffs and trade uncertainty were filtering into prices. Yields on shorter-dated Treasury bonds - a reflection of interest rate expectations - moved lower after the data and interest rate futures showed traders are giving an 88.8 per cent chance that the Fed could lower interest rates by about 25 basis points in September. "My bigger fear is that this is still early innings of this process and just as the Fed will be beginning to cut rates in the autumn, that's when the inflation data will probably start to be registering some of these more direct tariff price increases and it's going to complicate the rate-cutting decision," John Velis, a macro strategist at BNY said. The data also comes at a time when there are growing concerns over the quality of economic data, weeks after Trump fired the head of the Bureau of Labor Statistics following downward revisions to previous months' non-farm payrolls counts. In early trading on Tuesday, the Dow Jones Industrial Average rose 163.16 points, or 0.37 per cent, to 44,139.85, the S&P 500 gained 20.65 points, or 0.32 per cent, to 6,394.10 and the Nasdaq Composite gained 69.38 points, or 0.32 per cent, to 21,454.78. Eight of the 11 S&P 500 sectors were in gains, with energy in the lead with a 0.8 per cent rise. Further providing some relief, US and China extended their tariff truce until November 10 to stave off triple-digit duties on each other's goods. US stocks have rallied in recent weeks and the tech-heavy Nasdaq touched a record high on Tuesday, boosted by better-than-expected earnings from technology majors, a detente between the US and its top trade partners and on expectations of rate cuts. Reflecting the confidence, data from BofA Global Research showed that inflows into US stocks last week were the largest in two years. Markets are monitoring developments around Trump's nominee EJ Antoni to the Bureau of Labor Statistics commissioner post and potential candidates for the Fed's top job. Among single stocks, Intel rose 1.7 per cent as Trump praised CEO Lip-Bu Tan following their meeting on Monday, days after seeking Tan's resignation. Palo Alto Networks gained 2.0 per cent after brokerage Piper Sandler raised its rating on the cybersecurity stock to "overweight" from "neutral". US-listed shares of On Holding climbed 11.6 per cent after the sportswear maker raised its annual sales forecast. Cardinal Health dropped 9.0 per cent after the drug distributor said it will buy healthcare management firm Solaris for $US1.9 billion. Advancing issues outnumbered decliners by a 2.44-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq. The S&P 500 posted 14 new 52-week highs and eight new lows while the Nasdaq Composite recorded 43 new highs and 44 new lows.
SBS Australia
8 hours ago
- SBS Australia
What the RBA's interest rate decision means for your mortgage
The Reserve Bank's interest rate cut will be felt as good news for millions of mortgage holders across the country. The RBA announced a reduction in the cash rate by 0.25 percentage points from 3.85 per cent to 3.6 per cent. It marks the third rate cut this year, following similar reductions in February and May. RBA governor Michele Bullock acknowledged the cut comes as "households are still feeling the pain of higher costs". "The board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because when inflation is low and stable and people can get jobs; it's good for households, it's good for the community, and it's good for the broader Australian economy." So how much will mortgage holders save? Household savings on the way According to financial comparison website Canstar, mortgage holders with a $500,000 loan can expect to save around $74 per month. This estimate is based on an owner-occupier paying principal and interest with 25 years remaining on the mortgage. Those with higher mortgages, up to $1 million, can expect to save around $148 per month. Including the two previous rate cuts in February and May, the accumulated savings are even higher. Those with a $500,000 loan could potentially save $226 per month, while those with a $1 million loan could save up to $453 per month. Source: SBS News Will the banks pass the savings on? A number of banks have promised to pass the rate cut in full to customers. For Westpac customers, a -0.25 per cent rate adjustment will be passed on for variable interest rate home loans from 26 August. The Commonwealth Bank says its cuts will come into effect on 22 August. Macquarie Bank announced its variable rates will be reduced as of 15 August. ANZ and NAB have followed suit. Around 20 lenders also cut their variable rate ahead of the RBA's announcement. A number of major banks have promised to pass on the rate cut in full to customers. Source: AAP / Rick Rycroft Diana Mousina, deputy chief economist at AMP, urges caution as not all mortgage holders will be eligible for an automatic reduction. "There's not this automatic reduction to mortgage rates just because of what the RBA does. It may take a few months for it to actually get passed through to mortgage repayments." Paying more now to save later Canstar data insights director Sally Tindall suggests that some mortgage holders may benefit from keeping their repayments the same. "For those managing to hold their budgets together, consider keeping your repayments exactly the same," Tindall said. "Every rate cut is another opportunity to invest back into your mortgage and potentially be debt-free months, if not years early." If a mortgage holder who was sitting on a $600,000 loan in February kept their repayments steady, they would be paying $272 more per month in repayments than if they had lowered them to the minimum rate. But it would also mean shaving off three years and three months from the length of their mortgage. Ultimately, Tindall urges mortgage holders to weigh up what is best for them. A good time to talk to the bank "Ultimately, any sort of rate cut can still be seen as relief, but given that rates were hiked so much it's just taking some of that increased pressure away. Mortgage holders are still paying more than they were a few years ago." Mousina says that it's important to figure out if your current mortgage is appropriate for you. "You want to make sure your variable rate is the lowest you can have." Tindall says that after this rate cut, ambitious owner-occupiers should be able to set themselves a stretch target of 5.25 per cent. "Your mortgage rate is one number where you want to be aiming for well below average."
