Tariff Turmoil Masks South Africa's Recovery, Standard Bank Says
The recent downward revisions to the country's growth outlook are 'mostly a function of international flux, not so much a function of domestic concerns,' said Goolam Ballim, chief economist at Africa's largest bank by assets. 'It is international headwinds that have caused us to revise.'
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14 minutes ago
- Yahoo
Major bank responds to supersized RBA rate cut prediction giving homeowners $2,250 cash boost
Commonwealth Bank (CBA) has shut down speculation surrounding the possibility of a supersized rate cut from the Reserve Bank of Australia (RBA) today. The RBA will reveal whether it will hike, hold or cut the official cash rate from the current 3.85 per cent mark at 2.30pm (AEST). Despite the majority of experts tipping a 0.25 per cent reduction, there has been speculation of a 0.50 per cent cut following a surprise hold in July. However, CBA senior economist Belinda Allen told Yahoo Finance a supersized cut would be "extremely unlikely". "The economy is performing as [the RBA] expects, so the cautious and gradual easing cycle can continue," she said. RELATED CBA, Westpac, NAB, ANZ reveal interest rate cut forecasts as RBA decide Centrelink warning for downsizing Baby Boomers over 'special' retirement rule Kiwi couple move to Australia after 'overwhelming' $20,000 cost to start family The Australian Stock Exchange (ASX) Rate Tracker monitors the market's expectations around cash rate decisions, which is based on the determined prices in the ASX 30-Day Interbank Cash Rate Futures. Its most recent update, which was posted on August 11, said there was a 51 per cent chance of a 50 basis point reduction from the RBA today. That would bring the cash rate down from 3.85 per cent to 3.35 per cent. That prediction is up from a 47 per cent likelihood in late July. If there was a supersized rate cut, a person with a $660,000 mortgage would save around $210 per month, or $2,250 per there be a rate cut at the RBA's August meeting? CBA economists have described a cut in the RBA's August meeting is a "done deal". Economists from Westpac, NAB and ANZ have echoed sentiments from Australia's biggest bank, forecasting a third 0.25 per cent rate cut for the year. Many were dismayed when the July RBA meeting resulted in a hold. However, Allen told Yahoo Finance the Board didn't have the right information at the time. 'Back in July, they said it was about timing, not about direction,' she said. The RBA only had month-to-month inflation data when it met last month, however the Australian Bureau of Statistics has now dropped its quarterly assessment of the consumer price index (CPI). Underlying inflation, a key metric in the RBA's decision-making, dropped from 2.9 per cent to 2.7 per cent between the March and June quarters. The RBA has stated its underlying inflation target sits between 2 and 3 per cent. Allen said the quarterly inflation data has given the Board the data to warrant another rate cut. 'We've had that five-week period and the inflation data has come in as expected," Allen told Yahoo Finance. "You could even argue that the inflation data could have been a little bit softer than what they were expecting, so all signs point to them continuing their easing cycle today." The predicted interest rate cutting cycle, which is forecast to stretch into 2026, will drive property prices up by 10 per cent by the end of next year, CBA said. When will the next interest rate cut come? The Big Four Banks have all tipped November as the next time homeowners could get further mortgage relief. CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent ANZ: Two more cuts in August and November to bring cash rate to 3.35 per cent There is another meeting in September, however Allen warned that without the full quarterly inflation data, the RBA was likely to hold again as they waited for a full picture of the economic climate. The quarterly data will be next posted just before the November meeting. 'To deviate from that quarterly cadence, it would have to take a real big surprise in the data, as we know they're still a bit reluctant to rely on the monthly CPI,' she said. 'Unless you see, for example, a material lift in the unemployment rate, they'll stick to that once a quarter easing cycle.'Sign in to access your portfolio
Yahoo
14 minutes ago
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Why this week's inflation report could be a hit to the economy no matter what the data says
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Yahoo
14 minutes ago
- Yahoo
Trump extends tariff truce with China for 90 days
US President Donald Trump has ordered a 90-day extension to a US-China tariff truce, hours before it was due to expire – keeping higher duties on hold until November 10 as both sides continue trade talks. US President Donald Trump on Monday ordered a delay in the reimposition of higher tariffs on Chinese goods, hours before a trade truce between Washington and Beijing was due to expire. The White House's halt on steeper tariffs will be in place until November 10. "I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days," Trump wrote on his Truth Social platform. While the United States and China slapped escalating tariffs on each other's products this year, bringing them to prohibitive triple-digit levels and snarling trade, both countries in May agreed to temporarily lower them. Their 90-day halt of steeper levies had been due to expire Tuesday. Around the same time that Trump confirmed the new extension, Chinese state media Xinhua news agency published a joint statement from US-China talks in Stockholm saying it would also extend its side of the truce. China will continue suspending its earlier tariff hike for 90 days starting August 12 while retaining a 10-percent duty, the report said. It would also "take or maintain necessary measures to suspend or remove non-tariff countermeasures against the United States, as agreed in the Geneva joint declaration," Xinhua reported. In the executive order posted Tuesday to its website, the White House reiterated its position that there are "large and persistent annual US goods trade deficits" and they "constitute an unusual and extraordinary threat to the national security and economy of the United States." The order acknowledged Washington's ongoing discussions with Beijing "to address the lack of trade reciprocity in our economic relationship" and noted that China has continued to "take significant steps toward remedying" the US complaints. The 90-day extension means the truce is now set to expire just after midnight on November 10. - Trump-Xi summit? - "Beijing will be happy to keep the US-China negotiation going, but it is unlikely to make concessions," warned William Yang, an analyst at the International Crisis Group. He believes China sees its leverage over rare earth exports as a strong one, and that Beijing will likely use it to pressure Washington. US-China Business Council president Sean Stein said the current extension is "critical to give the two governments time to negotiate an agreement" providing much-needed certainty for companies to make plans. A trade deal, in turn, would "pave the way for a Trump-Xi summit this fall," said Asia Society Policy Institute senior vice president Wendy Cutler. But Cutler, herself a former US trade official, said: "This will be far from a walk in the park." Even as both countries reached a pact to cool tensions after high level talks in Geneva in May, the de-escalation has been shaky. Key economic officials convened in London in June as disagreements emerged and US officials accused their counterparts of violating the pact. Policymakers met again in Stockholm last month. Trump said in a social media post Sunday that he hoped China will "quickly quadruple its soybean orders," adding this would be a way to balance trade with the United States. As part of their May truce, fresh US tariffs targeting China were reduced to 30 percent and the corresponding level from China was cut to 10 percent. Separately, since returning to the presidency in January, Trump has slapped a 10-percent "reciprocal" tariff on almost all trading partners, aimed at addressing trade practices Washington deemed unfair. This surged to varying steeper levels last Thursday for dozens of economies. Major partners like the European Union, Japan and South Korea now see a 15-percent US duty on many products, while the level went as high as 41 percent for Syria. The "reciprocal" tariffs exclude sectors that have been targeted individually, such as steel and aluminum, and those that are being investigated like pharmaceuticals and semiconductors. They are also expected to exclude gold, although a clarification by US customs authorities made public last week caused concern that certain gold bars might still be targeted. Trump said Monday that gold imports will not face additional tariffs, without providing further details. The president has taken separate aim at individual countries such as Brazil over the trial of former president Jair Bolsonaro, who is accused of planning a coup, and India over its purchase of Russian oil. Canada and Mexico come under a different tariff regime. (AFP)
