RBA seen cutting three more times by early 2026, matching market
The Reserve Bank of Australia (RBA) will take its cash rate to 3.1 per cent in the first quarter of 2026, from 3.85 per cent now, and then pause for a prolonged period, according to the median estimate of 40 economists in a Bloomberg survey released on Wednesday (Jul 23).
While the RBA's easing cycle has coincided with counterparts from the UK to Canada and New Zealand, those peers have broadly moved at a faster pace. By contrast, the US Federal Reserve has yet to cut this year. Bloomberg Economics anticipates further measured reductions in coming months by most of the 23 central banks in its quarterly guide to the global monetary outlook.
Wednesday's poll follows the RBA's surprise decision this month to hold its cash rate steady, defying expectations for a cut. Minutes of the rate-setting board's Jul 7 to 8 meeting released on Tuesday showed policymakers judged that a third reduction in four reviews would conflict with their 'cautious and gradual' easing approach.
Luci Ellis, chief economist at Westpac Banking, pointed out that the RBA's preference is for rate reductions that coincide with the release of the staff's quarterly update of macroeconomic forecasts.
So a July move 'would have looked a bit like the market pricing forced the cut', said Ellis, who was previously an assistant governor at the RBA. 'The more recent data flow, including on the labour market, makes an August timing even more likely than it did immediately after the July meeting.'
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Figures last week showed Australian unemployment unexpectedly climbed to a four-year high in June as hiring almost stalled.
Still, the 4.3 per cent jobless rate and annual employment growth of 2 per cent were both broadly in line with the RBA's forecasts.
That's one reason why some economists, including Bank of America's Nick Stenner who accurately forecast the July pause, see a shallower easing cycle, with just two more cuts to come. Vanguard Investments Australia's Grant Feng concurs.
'We believe that the disinflation process in Australia will be slow,' Feng said. 'Consequently, the RBA is likely to adopt a cautious stance towards rate cuts, with the pace of easing expected to be gradual throughout the year.' BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
9 hours ago
- Business Times
Uber boosts buybacks by US$20 billion after upbeat forecast
[SAN FRANCISCO] Uber Technologies announced US$20 billion in new stock buybacks after sharing a better-than-expected third-quarter forecast and quarterly results, suggesting that growth at its core rideshare and delivery units still has room to pick up steam. Gross bookings – which include ride hails, delivery orders and driver and merchant earnings but not tips – will range from US$48.25 billion to US$49.75 billion for the three months ending September, Uber said in a statement on Wednesday (Aug 6). Wall Street was projecting US$47.6 billion, according to Bloomberg-compiled estimates. That would represent an 18-to-21 per cent growth rate, according to Bloomberg calculations, faster than the 17 per cent gain in second-quarter bookings. Adjusted earnings before interest, taxes, depreciation and amortisation for the second-quarter were a record US$2.12 billion, ahead of the US$2.09 billion that analysts had forecast. For the third quarter, Uber sees adjusted Ebitda from US$2.19 billion to US$2.29 billion, the mid-point of which also beats estimates. Shares of Uber rose 4.9 per cent in premarket trading after the company posted the results and increased its share repurchase by US$20 billion. It has US$3 billion remaining from its prior buyback authorisation. Uber's results are likely to set expectations for the broader ride-hailing and food-delivery industries, with rideshare peer Lyft and delivery rival DoorDash both scheduled to report results after the close on Wednesday. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Total second-quarter bookings came in at US$46.8 billion, ahead of expectations, with a robust showing from Uber's delivery unit outweighing a small miss in rideshare bookings. More users were placing delivery orders in the US, Australia, Canada and Mexico. He also cited an uptick in grocery and retail merchants on the platform, chief executive officer Dara Khosrowshahi said in a statement. The company completed its acquisition of Turkish delivery app Trendyol Go at the end of the second quarter, which will help boost business in the country, he added. The company's signature rideshare unit recorded US$23.8 billion in gross bookings in the second quarter, shy of the US$23.9 billion analysts were expecting. Uber has been offering more types of trip types to cater to different user needs. While ride prices have been increasing less sharply as of late thanks to moderating insurance costs, the firm said its efforts to improve affordability in the US are also helping boost trip growth in the current period. In May, for example, it launched cheaper pooled rides and a monthly ride pass allowing commuters to lock in prices on frequently taken routes. Uber partially attributed the results to the cross-selling advantage it has for the two core services it offers. Khosrowshahi said that 12 per cent of annualised delivery bookings – translating to US$10 billion – are generated via the Eats tab within the Uber rideshare app. Subscribers for Uber One, the company's paid membership programme, jumped about 60 per cent from the year-earlier period, topping 36 million. Those members now generate 40 per cent of total gross bookings. Internationally, Uber said it's 'redoubling' efforts to increase its presence outside large European cities, as well as in new markets through taxi partnerships. Competition is set to heat up in the continent after rival Lyft entered new European countries through its acquisition of the taxi app Freenow. The company is also looking to monetise more of its US$8.7 billion equity stakes – most of which are publicly listed – to help seed investments related to the commercialisation of autonomous vehicles, said chief financial officer Prashanth Mahendra-Rajah in prepared remarks. BLOOMBERG
Business Times
9 hours ago
- Business Times
Wee Hur jumps 6.5% to record high as Australia raises cap on foreign students
[SINGAPORE] Shares of student accommodation operator Wee Hur hit an all-time high on Wednesday (Aug 6), following news that Australia will lift its foreign student cap in 2026. As at 1.57 pm, the counter was trading at S$0.74, a record high according to Bloomberg data, with around 14.6 million shares changing hands. This was 6.5 per cent or S$0.045 above its Tuesday closing price of S$0.695. It ended Wednesday at S$0.74, with some 17.2 million shares transacted. The stock is up more than 15 per cent since the start of the trading week. On Monday, the Australian government announced that the country would raise its cap on foreign students by 9 per cent to 295,000 next year and prioritise applicants from South-east Asia. In the year to date, the counter has risen 76.2 per cent, from S$0.42 on the last trading day of 2024. Wee Hur has eight facilities for purpose-built student accommodation in Australia. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up It is one of 30 Singapore-listed stocks in the portfolio of US-based exchange-traded fund (ETF), Avantis International Small Cap Value ETF. As at Monday, the ETF had increased its stake in Wee Hur to 22.4 million shares, from 21.4 million shares on Jul 24. Rule relaxed Nearly 600,000 student visas were granted in Australia in FY2023. International students flocked to the country in record numbers following the Covid-19 pandemic, with those from China and India forming the largest cohorts. Limits on places for foreign students were announced in 2024. The Australian government also more than doubled the foreign student visa fee and pledged to close loopholes permitting students to continuously extend their stays. However, as efforts to lower foreign student numbers have been succeeding, an additional 25,000 places will be granted in 2026, the Australian government said on Monday. International Education Assistant Minister Julian Hill noted that the measures to curb migration were 'bearing fruit', allowing for the cap to be moderately raised next year, Reuters reported. Around two-thirds of places will be allocated to universities, and one-third to the vocational skills training sector. Additionally, larger, public universities must demonstrate that domestic and international students have 'access to safe and secure housing' and recruit more students from South-east Asia, the Australian government said. As Australia seeks to reduce economic reliance on China, South-east Asia relations have been a focus of Prime Minister Anthony Albanese's government. Hill noted that it was important for Australia's 'future soft power' that the country 'continues to bring the best and brightest from (its South-east Asian) neighbours to have a bit of Australia with them for the rest of their life'. Goh Wee Ping, chief executive of Wee Hur's fund management business, Wee Hur Capital, said: 'The government's decision to link international student intake with dedicated student accommodation is a smart and necessary step.' Beds offered by the student accommodation operator ease pressure on the private rental market, he added. 'This policy clarity gives providers like us the confidence to accelerate our pipeline, working alongside universities and cities to ensure international education growth is supported by purpose-built infrastructure – not squeezed into an already tight housing market.'
Business Times
13 hours ago
- Business Times
Vietnam trade beats estimates as buyers race Trump tariffs
[HANOI] Vietnam's exports jumped more than expected in July, with buyers racing to avoid a 20 per cent tariff on the country's exports to the US set to take effect on Aug 7. Exports rose 16 per cent in July from a year earlier to US$42.3 billion, the statistics office said in a statement, beating expectations of 14 per cent growth. Imports rose 17.8 per cent in the period to US$40 billion, more than the 15.2 per cent forecast. The trade surplus was US$2.27 billion, versus US$2.83 billion released in June. The country, an export powerhouse that sells everything from coffee and clothing to engine parts, has been shipping more goods this year to buyers aiming to avoid US President Donald Trump's tariffs. It was initially threatened with a 46 per cent import levy, though that has been lowered to 20 per cent, just one percentage point more than for neighbours Indonesia, Malaysia, the Philippines and Thailand. 'Vietnam posted impressive export figures in July, mostly because companies were rushing to ship goods to the US ahead of the Trump tariffs,' said Tran Tuan Minh, chief executive officer of TVI, a Hanoi-based equity research and investment firm. 'We expect exports to slow significantly later this year, mainly due to the 20 per cent tariffs and especially the 40 per cent rate on transshipments, which still remains quite unclear at this point.' The government said in a statement on Wednesday (Aug 6) that trade negotiators are working to 'actively continue' talks with Washington. It also reiterated plans to diversify its markets, aiming for trade agreements with the Middle East and India, while increasing domestic consumption of Vietnamese goods. Exports to the US rose 26 per cent in July from a year earlier to US$14.2 billion, according to separate customs data released on Wednesday. Imports from China increased 30.5 per cent to about US$16.7 billion in July. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Net exports to the US account for roughly a fifth of Vietnam's gross domestic product, and the tariffs pose a threat to factories which have boomed as companies have diversified their supply chains from China. The data was generally positive, with consumer prices rising 3.19 per cent on year, slower than the 3.40 per cent economist estimate and the 3.57 per cent pace of June. Industrial production rose 8.5 per cent on year, and 0.5 per cent compared with June. Commodity exports also gained, with coffee exports rising to 103,000 tonnes, a 34.6 per cent rise on a year earlier. The economy has been powering along in 2025, with gross domestic product rising 7.96 per cent in the April-to-June period from a year earlier, according to data released last month. The government is aiming for 8 per cent growth in 2025, though it's unclear whether the new US tariffs will derail that push. BLOOMBERG
