Interest rate cut tipped despite Trump tariff backdown
A clear majority of economists believe the Reserve Bank of Australia will cut interest rates at its next meeting, but developments abroad mean it's no longer a sure thing.
US President Donald Trump recently slashed tariffs on China to 35 per cent from a whopping 145 per cent, prompting Beijing to lower its own tariff wall and triggering a rebound in values for riskier assets such as shares.
Following strong labour market data released on Thursday, the market now predicts three rate cuts by year's end, down from four priced in at the start of the week.
But traders are still nearly fully priced in for a 25 basis point cut to the cash rate, which sits at 4.1 per cent, on Tuesday.
Almost nine in 10 economists agreed in a survey by comparison website Finder.
Oxford Economics Australia's Sean Langcake is among the vast majority of the 41 economists surveyed who predict a cash rate reduction.
Despite better news on the tariff front, the economy would still be negatively impacted by the "uncertainty shock", he said.
"With upside inflation risks dissipating, the RBA can afford to lend the economy some more support," Mr Langcake added.
Economists at all four big banks also expect a cut, with NAB still holding onto its prediction of a turbocharged 50 basis point cut.
Nomura analysts Andrew Ticehurst and David Seif said the case for an "aggressive" 50-point cut was relatively weak, given the detente in the Sino-American trade war.
"We expect the RBA to deliver a 25 basis point rate cut, reflecting both further welcome progress in returning core inflation back towards target and the continuing highly uncertain global backdrop," the pair said.
The central bank will also update its quarterly economic predictions on Tuesday in an otherwise quiet week on the data front.
The Victorian government will unveil its budget on the same day, with ratings agency S&P Global warning the nation's most indebted state to rein in spending or risk seeing its AA credit rating downgraded further.
Meanwhile, US markets were buoyed by the tariff reprieve, rising for their fifth day in a row by the end of the week.
Australian shares reached a three-month high on Friday after eight straight sessions of gains.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Herald Sun
29 minutes ago
- Herald Sun
Brunswick: Victorian-era house transforms after major reno
It was a very different world when Matt Smyth and his now wife Emma Rigby bought their first home, a heritage Victorian, in August, 2020. 'We bought the house on the day we went into the second lockdown. It was around the time when everyone was predicting prices would tank due to the 'mortgage cliff', so it felt quite risky at the time,' Smyth says. MORE: 'Biggest challenge' facing popular VIC region Whisk taker: Dessert Masters winner's $100k gamble Myer family reveal new look for $100m estate The three-bedroom Brunswick home was also very different to what it is now. 'The house hadn't been touched since the 1950s but because of the significant work needed, it fell into our price range,' he says. 'With the deep block, we knew that eventually, with a lot of work, it would be a ripper house,' he adds. And that is what the couple set out to achieve through their extensive renovations. Due to the planning, the pandemic, and the shortage of materials, the extension took considerably more time to complete. The extension features a large, open-plan kitchen, dining and living area built on a heated, polished concrete slab, as well as a double garage and the conversion of the old living room into an ensuite and main bathroom. 'The biggest difference from what it was before is the fact that it's warm in winter and cool in summer,' Smyth says. 'Putting in proper insulation, double-glazed windows in the extension, and providing the option of panel heaters, underfloor heating, split systems in all the major rooms and a wood-burning fire has completely changed the enjoyment of living in the classic, draughty Victorian weatherboard.' Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox. MORE: Nation's cheapest home loan hits shock low First-home buyers hit with $40k+ tax bill Why The Block architect says beige is over
Sky News AU
35 minutes ago
- Sky News AU
Defence spending only happening ‘in the long term'
ASPI Senior Analyst Malcolm Davis discusses the Australian government's defence spending. Mr Davis told Sky News host Chris Kenny that the Albanese government has been stressing the 'challenging times' for national security. 'Although the government is increasing defence spending in the long term, that increase is not happening until the late 2028-2029 period, going into the 2030s.'
Sydney Morning Herald
38 minutes ago
- Sydney Morning Herald
The 15 next big things in dining, around the world
Restaurants sober up Speaking of Marguerite, that Singapore eatery has recently got on board with a global trend towards 'temperance travel', that is, alcohol-free adventures. Plenty of restaurants around the world now are pushing things well beyond kombucha for those hoping for interesting non-alcoholic drinks to pair with their meals. Denmark's Geranium is a leader, presenting a 'Fruit and Vegetables' drinks pairing. Restaurant Frantzen in Stockholm has a similar offering, while Los Angeles fine diner Meteora is also a star. In Singapore, meanwhile, some 40 per cent of guests at Marguerite opt for a fully non-alcoholic or mixed pairing, taking advantage of a selection of clarified juices that the team says offer the same depth and complexity as wine. For example, caramelised Gala apples with verjuice and celeriac, infused with oak chips, to resemble a light chardonnay. See The Philippines gets starry-eyed Filipino food has been having a moment for a while now. This, in Australia at least, is due in large part to chef Ross Magnaye, whose elevated Filipino eatery Serai has made a real splash on the Melbourne scene. The Victorian capital now has a whole swag of exciting Filipino restaurants, from the down-home but tasty GJ's Grill, to grocer-cum-diner Ceree, to refined eatery Askal. Prepare yourself, however, for even more attention on cuisine from the Philippines because next year the country is getting its first Michelin guide. The French dealers of the coveted stars will cover Manila and Cebu, with reviews and stars set to be unveiled in the last quarter of 2025. See Chile v Argentina There's always been rivalry between neighbours Chile and Argentina, a battle mostly fought on the football field, though the countries' wineries are also friendly competitors. Each nation has its signature grape – in Argentina it's malbec; in Chile it's carmenere – not to mention spectacular scenery in its key regions. And now, even its cellar doors are locked in competition, with an impressive array of high-end facilities matching it with the big guns of France and Spain. The most recent World's Best Vineyards list included an impressive four Chilean and six Argentinean wineries in its top 50 (Australia scored two: d'Arenberg and Magill Estate). The highest placed of those was VIK in Millahue, Chile, at No.2. So who is the real winner? You. See Big openings in Tokyo Tokyo is about to get two huge new culinary precincts. This year, both the Takanawa Gateway and Blue Front developments will be going through staggered openings. Set just a short distance apart in southern Tokyo, within striking distance of Haneda Airport, Takanawa Gateway and Blue Front are multi-building complexes featuring high-end hotels (a JW Marriott in the former, Fairmont Tokyo in the latter) as well as significant food and beverage offerings opening throughout the year. The Fairmont alone will offer three levels of restaurants and bars. See Margaret River dines out Which Australian wine region has the best dining? Is it Mornington Peninsula, with Tedesca Osteria, Ten Minutes by Tractor, Laura and Many Little? Maybe. Though perhaps it's the Barossa, with Hentley Farm, Fino, Appellation and Orleana? Though, don't forget Margaret River. At the recent WA Good Food Guide Awards, 'Margs' restaurants picked up a swag of honours; new restaurant of the year went to De'sendent in Margaret River town; regional restaurant of the year was won by winery Voyager Estate; and regional chef of the year went to Vasse Felix's Cameron Jones. These awards recognise the rich culinary scene in one of Australia's premier wine regions, and with direct flights from both Melbourne and Sydney to Busselton, now's the time to check it out. See Star chefs take flight There's a trend worldwide for high-end hotels and resorts to welcome guest chefs for a few days or even a week to cook up a storm. In Australia, Kittawa Lodge on King Island will this year welcome two chefs doing three-night stints: Rosheen Kaul, author and contributor to Good Food; and Stephen Nairn, a finalist for Good Food Guide chef of the year in 2022 and 2023. Elsewhere, the Anantara Veli Maldives has a series of seven guest chefs arriving this year; the Datai Langkawi, Malaysia has Michelin-starred chefs visiting throughout 2025; and The Loren in Bermuda has James Beard Award winners arriving throughout the summer. See First Nations wine on the list So much of a visit to Uluru is about learning how traditional owners connect with country, so it's great to see those owners featured on a wine list. Ayers Rock Resort has recently added two First Nations-owned wineries to its restaurants' selections: Munda Wines and Mt Yengo Wines. These wineries join Indigenous-owned companies Jarrah Boy, Beachtree Distilling Company and Yaru Water on the beverage list. In Perth, meanwhile, the Ritz-Carlton's in-house restaurant Hearth has teamed up with roving foodie collective Fervor to offer some incredible culinary journeys, including a guided tour of the traditions and bush tucker of Bardi Jawi Country in the Kimberley by chef Paul Iskov. See Josh Niland swims north Sydneysider Josh Niland would have to be Australia's most exciting chef right now, an endlessly talented cook who has revolutionised fish cookery worldwide, while also winning three hats in the 2025 Good Food Guide at his flagship eatery, Saint Peter. Niland also runs Fysh, a Singapore fine diner, and now he's popped up on Hamilton Island, with the opening of Catseye Pool Club, a beachside bistro at the new The Sundays hotel. At Catseye, Niland presents a menu focused on local produce – hand-caught coral trout, CopperTree Farm beef, eastern rock lobster – served family-style, with all the trimmings. Think of it as the best beachside barbecue you've ever been to. See German fine dining? It's real You can have your laughs about German food. It's all pretzels and sausages, it's not a meal unless it's served with a beer. But you're missing out because German fine dining is a thing, and it's very, very good. Exhibit A: check out Berlin, which has a thriving dining scene that includes a three-Michelin-star restaurant (Rutz), as well as two that have made the most recent World's 50 Best list: Restaurant Tim Raue (No.30) and Nobelhart & Schmutzig (No.43). Bizarrely, however, the world's best German fine diner might just be in Bangkok. There, Suhring, run by brothers Thomas and Mathias Suhring, serves up intelligent, refined German cuisine in the gorgeous surrounds of a 1970s villa. If this is the future of German food, it's in good hands. See Devour Tours: the little company that could We love to see an underdog succeed, and Devour Tours is a true underdog in a world of giant travel players. The company was founded in 2012 by Lauren Aloise, an American expat who wanted to show tourists around Madrid's markets. Devour Tours now offers food tours and experiences in 18 cities in nine countries across Europe and North America, and it has stayed true to its original ethos, introducing visitors to niche producers and local-favourite bars and restaurants. If you're travelling through one of those 18 cities, steer clear of the big players and give Devour a try. See Cantonese gets respect What is Cantonese food? To plenty of Australians it's raucous yum cha on a weekend, and baine-marie sweet and sour pork. It's a pleasure, in that case, to see the high-end side of Cantonese cuisine finally being recognised. At the recent announcement of Asia's 50 Best Restaurants, Hong Kong establishments The Chairman and Wing took out second and third place respectively. Both serve refined Cantonese cuisine, and had previously been included in the World's 50 Best list. Hong Kong's bar scene is also thriving, and the city will host the World's 50 Best Bar awards in October. See Get off the bus for vineyards Loading Bus tours of wineries are so last year. Or maybe a few years ago. There's been a growing trend among tour companies for more active explorations of the world's most famous wine-producing regions. Australia-based company uTracks in particular has noticed a swell in interest in its Vineyard Trails and Wine Region Walking Tour travel offerings. These trips include multi-day, self-guided walks through the likes of Bordeaux, the Loire Valley, Piedmont and the Douro Valley, as well as self-guided cycling trips through Champagne, Burgundy, Alsace, the Rhine Valley and more. The idea of these trips is to take things slow, to immerse yourself in the culture and pace of these regions, explore the backroads, connect with locals and get a little exercise while doing it. See
