Price moves to help RBA plot course through uncertainty
The Reserve Bank could use fresh inflation insights to gauge the depth of further rate cuts as global uncertainty threatens Australia's economic progress.
Consumer price data for April, to be released on Wednesday, will help guide the RBA on future changes after it reduced the cash rate to its lowest level in two years.
The decision showed the central bank was moving in a more dovish direction as Australia's main inflation measure returned to its target range of two to three per cent, NAB economists Michelle Shi and Gareth Spence said.
The RBA on Tuesday cut the official cash rate by a quarter of a percentage point to 3.85 per cent.
NAB economists predict another three rate cuts in the second half of 2025, bringing the cash rate to a "broadly neutral" stance of 3.1 per cent by November.
But US tariff drama and the unpredictability of Donald Trump's economic actions will continue to loom large over RBA meetings.
High levels of global uncertainty are likely to persist even as trade tensions ease between the US and China, the NAB economists warn.
"Unless pushed, the RBA could take a more gradual path towards neutral while watching the inflation data over time," they said.
Over the previous decade, Australian inflation has rarely been "just right".
JP Morgan's chief economist for Australia and New Zealand, Ben Jarman, warned the monthly inflation indicator could suggest "too much of a good thing" and drop below the target band.
However, quarterly trimmed mean inflation - the RBA's preferred measure - was more likely to be sticky due to a strong jobs market, which meant core inflation could stay within the bank's target into 2026, Mr Jarman said.
Rate cuts could lead to a rebound in home construction, Housing Industry Association chief economist Tim Reardon said, as the Australian Bureau of Statistics prepares to release building approvals data on Friday.
While the sector is already showing signs of improved confidence with homebuilding expected to increase across the next five years, long-term issues such as land shortages pose risks to affordability and reaching national supply targets.
"Australia has the capacity to deliver, but it will take a co-ordinated response from all three tiers of government to overcome these constraints," Mr Reardon said.
Retail trade figures for April are also due on Friday after the RBA flagged consumer spending had been softer than expected in recent months.
This will be the one of the last retail trade releases before the statistics bureau replaces the series with a broader household spending indicator.
The Reserve Bank could use fresh inflation insights to gauge the depth of further rate cuts as global uncertainty threatens Australia's economic progress.
Consumer price data for April, to be released on Wednesday, will help guide the RBA on future changes after it reduced the cash rate to its lowest level in two years.
The decision showed the central bank was moving in a more dovish direction as Australia's main inflation measure returned to its target range of two to three per cent, NAB economists Michelle Shi and Gareth Spence said.
The RBA on Tuesday cut the official cash rate by a quarter of a percentage point to 3.85 per cent.
NAB economists predict another three rate cuts in the second half of 2025, bringing the cash rate to a "broadly neutral" stance of 3.1 per cent by November.
But US tariff drama and the unpredictability of Donald Trump's economic actions will continue to loom large over RBA meetings.
High levels of global uncertainty are likely to persist even as trade tensions ease between the US and China, the NAB economists warn.
"Unless pushed, the RBA could take a more gradual path towards neutral while watching the inflation data over time," they said.
Over the previous decade, Australian inflation has rarely been "just right".
JP Morgan's chief economist for Australia and New Zealand, Ben Jarman, warned the monthly inflation indicator could suggest "too much of a good thing" and drop below the target band.
However, quarterly trimmed mean inflation - the RBA's preferred measure - was more likely to be sticky due to a strong jobs market, which meant core inflation could stay within the bank's target into 2026, Mr Jarman said.
Rate cuts could lead to a rebound in home construction, Housing Industry Association chief economist Tim Reardon said, as the Australian Bureau of Statistics prepares to release building approvals data on Friday.
While the sector is already showing signs of improved confidence with homebuilding expected to increase across the next five years, long-term issues such as land shortages pose risks to affordability and reaching national supply targets.
"Australia has the capacity to deliver, but it will take a co-ordinated response from all three tiers of government to overcome these constraints," Mr Reardon said.
Retail trade figures for April are also due on Friday after the RBA flagged consumer spending had been softer than expected in recent months.
This will be the one of the last retail trade releases before the statistics bureau replaces the series with a broader household spending indicator.
The Reserve Bank could use fresh inflation insights to gauge the depth of further rate cuts as global uncertainty threatens Australia's economic progress.
Consumer price data for April, to be released on Wednesday, will help guide the RBA on future changes after it reduced the cash rate to its lowest level in two years.
The decision showed the central bank was moving in a more dovish direction as Australia's main inflation measure returned to its target range of two to three per cent, NAB economists Michelle Shi and Gareth Spence said.
The RBA on Tuesday cut the official cash rate by a quarter of a percentage point to 3.85 per cent.
NAB economists predict another three rate cuts in the second half of 2025, bringing the cash rate to a "broadly neutral" stance of 3.1 per cent by November.
But US tariff drama and the unpredictability of Donald Trump's economic actions will continue to loom large over RBA meetings.
High levels of global uncertainty are likely to persist even as trade tensions ease between the US and China, the NAB economists warn.
"Unless pushed, the RBA could take a more gradual path towards neutral while watching the inflation data over time," they said.
Over the previous decade, Australian inflation has rarely been "just right".
JP Morgan's chief economist for Australia and New Zealand, Ben Jarman, warned the monthly inflation indicator could suggest "too much of a good thing" and drop below the target band.
However, quarterly trimmed mean inflation - the RBA's preferred measure - was more likely to be sticky due to a strong jobs market, which meant core inflation could stay within the bank's target into 2026, Mr Jarman said.
Rate cuts could lead to a rebound in home construction, Housing Industry Association chief economist Tim Reardon said, as the Australian Bureau of Statistics prepares to release building approvals data on Friday.
While the sector is already showing signs of improved confidence with homebuilding expected to increase across the next five years, long-term issues such as land shortages pose risks to affordability and reaching national supply targets.
"Australia has the capacity to deliver, but it will take a co-ordinated response from all three tiers of government to overcome these constraints," Mr Reardon said.
Retail trade figures for April are also due on Friday after the RBA flagged consumer spending had been softer than expected in recent months.
This will be the one of the last retail trade releases before the statistics bureau replaces the series with a broader household spending indicator.
The Reserve Bank could use fresh inflation insights to gauge the depth of further rate cuts as global uncertainty threatens Australia's economic progress.
Consumer price data for April, to be released on Wednesday, will help guide the RBA on future changes after it reduced the cash rate to its lowest level in two years.
The decision showed the central bank was moving in a more dovish direction as Australia's main inflation measure returned to its target range of two to three per cent, NAB economists Michelle Shi and Gareth Spence said.
The RBA on Tuesday cut the official cash rate by a quarter of a percentage point to 3.85 per cent.
NAB economists predict another three rate cuts in the second half of 2025, bringing the cash rate to a "broadly neutral" stance of 3.1 per cent by November.
But US tariff drama and the unpredictability of Donald Trump's economic actions will continue to loom large over RBA meetings.
High levels of global uncertainty are likely to persist even as trade tensions ease between the US and China, the NAB economists warn.
"Unless pushed, the RBA could take a more gradual path towards neutral while watching the inflation data over time," they said.
Over the previous decade, Australian inflation has rarely been "just right".
JP Morgan's chief economist for Australia and New Zealand, Ben Jarman, warned the monthly inflation indicator could suggest "too much of a good thing" and drop below the target band.
However, quarterly trimmed mean inflation - the RBA's preferred measure - was more likely to be sticky due to a strong jobs market, which meant core inflation could stay within the bank's target into 2026, Mr Jarman said.
Rate cuts could lead to a rebound in home construction, Housing Industry Association chief economist Tim Reardon said, as the Australian Bureau of Statistics prepares to release building approvals data on Friday.
While the sector is already showing signs of improved confidence with homebuilding expected to increase across the next five years, long-term issues such as land shortages pose risks to affordability and reaching national supply targets.
"Australia has the capacity to deliver, but it will take a co-ordinated response from all three tiers of government to overcome these constraints," Mr Reardon said.
Retail trade figures for April are also due on Friday after the RBA flagged consumer spending had been softer than expected in recent months.
This will be the one of the last retail trade releases before the statistics bureau replaces the series with a broader household spending indicator.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
12 minutes ago
- News.com.au
Argonaut Algorithm: Lithium stocks are getting cheaper, so you don't need to skimp on quality
Argonaut Funds Management's David Franklyn joins Stockhead to share investing secrets from the high-conviction resource sector investing fund, including his junior stock pick of the month. Lithium prices have tumbled to a fresh four year low of late. After numerous dead cat bounces in the US$800/t range last year, 6% Li2O spodumene – the kind of lithium produced by WA's hard rock miners – is trading at US$620/t according to Fastmarkets. Those are levels that only Greenbushes in WA's South West, the highest grade hard rock lithium mine in the world, is really making money on. Prices last bottomed out at US$375/t in March 2020, before the EV boom that temporarily sent them as high as US$8000/t on the spot market in late 2022. It's impossible to predict if and when that could happen again. But fund manager David Franklyn has an important message. With lithium stocks all off the boil, it's the right time to trade out marginal players for true quality. It's like heading to a McDonalds only to find out the place next door is selling a porterhouse for only a couple bucks extra. "I think the advantage you have where you're looking at a sector where it's near the bottom of the cycle rather than near the top of the cycle, is you don't need to compromise on quality," he said. "What we tend to do is go, do we think we can double our money in the next three years? "You don't really know when that turn in the market is going to happen, whether it happens in the first three months that you own it or whether it happens in two years and nine months. "We're here for a medium-term investment and we're happy to wait and see when that return actually pays off." The turn It's impossible to really say where the top or bottom of any market is. Despite the hype around the battery metal, lithium remains small and immature, with price-setting opaque and futures markets in their infancy. It can make it hard to truly assess the role supply and demand plays in setting prices, especially with two of the market's biggest end users – dominant Chinese battery producer CATL and EV maker BYD stepping upstream into the raw materials space to secure their own supply chains. They operate higher cost lepidolite mines, a lower grade, lower quality form of hard rock lithium, that counts as a major swing factor for lithium supply – a market otherwise dominated by Australian and African spodumene and South American brines. "The industry is dominated by CATL and BYD. They produce about over 55% of global batteries. And therefore they're the biggest buyer of lithium," Franklyn said. "You could argue they're bringing on high cost lepidolite a time the market's slightly oversupplied to force the price down, because ultimately they're a big buyer of lithium and by doing that they're reducing their purchase price. "It reflects the fact that lithium is still a small market, it's dominated by a small number of major players and therefore it is open to some form of manipulation." Yet feedback from lithium suppliers suggests demand remains strong. "You've got a doubling of (demand in) the industry in the next five years and you have prices that are going down," Franklyn said. "I think we're getting near the bottom of the market and the question is do you start to chip away at some of these good quality lithium stocks." There are four serious players in the lithium mining space – Pilbara Minerals (ASX:PLS), IGO (ASX:IGO), which owns ~25% of Greenbushes, Mineral Resources (ASX:MIN) and Liontown Resources (ASX:LTR). MinRes and Liontown are "very good businesses" but still have debt concerns to address. "At this point in the cycle, do you want to take on the additional risk? And our view is, I don't think you need to," Franklyn said. With IGO saddled by two troublesome lithium refining plants and a nickel business that's winding down, that makes the cashed up Pilbara the standout option for Argonaut. "The benefit of Pilbara is it's got net cash of about $700m and it's very well positioned," Franklyn said. "I'd probably put Pilbara slightly ahead of IGO." PLS shares rose a heady 5.6% on Wednesday to $1.425 after a 23% increase in lithium resources at its flagship Pilgangoora mine in WA's North West to 446Mt at 1.28% Li2O. It remains some way of its $5.31 boom time highs. Junior stock of the month Patriot Battery Metals (ASX:PMT) For Franklyn, the Canadian developer led by former PLS MD Ken Brinsden remains the standout junior stock in the lithium market. "At the developer level the benefit you've got is you can focus on quality," Franklynsaid. "It's got a market cap of $420m, it's the largest hard rock lithium asset in the Americas, it's high grade, simple mineralogy, it's got VW's as a strategic partner, it has got 4.8 million tonnes of contained LCE, so it's huge. " It kind of ticks all the boxes as a high-quality emerging player in the lithium space. And being in North America also makes some sense as, as you see what's happenin with the US and Canada, where Canada's making projects easy to get up and running, and the US is really pushing for critical minerals supply coming from areas close by." Argonaut Funds Management is a high conviction resource sector investor managing the Argonaut Natural Resources Fund and the Argonaut Global Gold Fund. David Franklyn is the Fund Manager for the Argonaut Natural Resources Fund. The views, information, or opinions expressed in this article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
News.com.au
12 minutes ago
- News.com.au
Mitsubishi Australia boss: Why PHEV is the hybrid worth having
As CEO of Mitsubishi Motors Australia, I have the privilege of speaking to people both inside and outside the automotive industry every day. Unsurprisingly, the conversation almost always turns to vehicles and EV technology. As Australia works toward our 2030 and 2050 emissions targets, these conversations are more important than ever. The path to Net Zero will be driven by technology – and there is more than one way to get there. Battery Electric Vehicles (BEVs) are often seen as the ultimate solution – and we're proudly launching a new one next year – but they are not the only answer. In the race toward a cleaner, greener transport future, Plug-In Hybrid Electric Vehicles (PHEVs) represent a smart and practical choice for many Australians. When people hear the word hybrid, they often think of traditional hybrid vehicles – cars powered primarily by a petrol engine, supported by a small battery and electric motor. These batteries charge through regenerative braking and the internal combustion engine, with no need to plug in. While the petrol engine in a hybrid vehicle is always in use, it will produce lower fuel emissions than a standard vehicle with an internal combustion engine. PHEVs, in contrast, can be plugged in – combining a significantly larger battery than a standard hybrid, while still retaining an on-board generator that can recharge the battery when needed. And that's the key distinction between PHEVs and hybrids: with a hybrid you are never travelling in pure electric mode – there is always reliance on petrol. But with a PHEV, you can drive in 100 per cent electric mode and for many Australians, use zero fuel on daily commutes. In Australia, the average daily commute is just 35km – often to drop the kids at school, drive to work, and stop at the shops on the way home. The Mitsubishi Outlander PHEV delivers up to 84km of EV range – easily covering most people's daily needs without using a drop of petrol. In fact, our customer surveys show that 81 per cent of trips in a PHEV are completed in electric mode. Personally, I drive on battery 98 per cent of the time – thanks to solar panels at home and at work. Unlike fully-electric vehicles, PHEVs don't need expensive chargers. You can plug them into a regular socket overnight – just like your mobile phone. And when a longer journey is required – whether a family trip interstate or to the outback in search of adventure – the on-board generator takes over without the anxiety of trying to find a charger. This is why we believe PHEVs are perfectly suited to the Australian landscape and lifestyle. PHEV technology is the best of both worlds: benefits of electric driving with the flexibility of an on-board generator when you need it. Think of them as electric cars with a built-in safety net. This is important, because only 15 per cent of Australians agree with the statement: 'It's easy to find a place to plug in and recharge my vehicle'. At Mitsubishi, we're proud to offer vehicles that support adventure and sustainability. Our PHEVs give drivers the freedom to go anywhere, anytime – while immediately reducing fuel emissions. They also help overcome one of the biggest barriers to electric vehicle adoption: charging anxiety. It's a challenge that won't be fully addressed until public charging infrastructure is more widely available. They're also future-ready. Mitsubishi PHEVs come with bi-directional charging – meaning your vehicle can power your home or even feed energy back to the grid. You don't need to invest in a separate home battery – you already have one in your driveway with a Mitsubishi badge on the front! Although this technology is just beginning to roll out across Australia, early adoption has been strong. The Australian Renewable Energy Agency predicts bi-directional charging could be as widespread as rooftop solar, with up to 2.6 million residential installations by 2040. With solar, if you don't use it, you lose it – and PHEVs can store the energy for you until you need it. As a side-note, Mitsubishi was the first manufacturer to bring a PHEV SUV to market. The Mitsubishi Outlander PHEV launched in 2013, became a global bestseller, and the nameplate was one of the top-two best-selling PHEVs in Australia last year. So if you're in the market for a new vehicle – one that reduces your fuel costs, removes range anxiety, and can even power your home – make sure you consider our PHEV EOFY offers!
7NEWS
an hour ago
- 7NEWS
Hunt for mystery Sydney winner of $100m Powerball jackpot
The hunt is on for the lucky winner of Thursday night's $100m Powerball draw with the mystery player not registering the winning ticket. One player managed to snag the entire jackpot, Powerball's richest for 2025. Know the news with the 7NEWS app: Download today The winning numbers for Powerball draw 1517 are: 28, 10, 3, 16, 31, 14 and 21. The Powerball is 6. However Australia's newest millionaire remains a mystery, potentially completely oblivious to his or her newfound fortune. The winning ticket was bought in Sydney's eastern suburbs, so residents of the area or anyone who may have visited and purchased an entry into the draw while there, have been urged to check their tickets. 'If you discover you're holding the division one winning entry, hold on tight to that ticket and phone 131 868 as soon as possible so that we can start the prize claim process,' officials from The Lott said. In addition to the jackpot winner, six players took home $282,000 each in division two, while 187 players scored $11,200 in division three. Thursday's winner instantly rockets to equal third in terms of most lucrative individual lottery wins in Australian history. The last time Powerball reached $100m heights was in November. Just six Australians know exactly how it feels to win a Powerball prize of $100 million or more.
