Latest news with #Auld
Sky News AU
21-05-2025
- Business
- Sky News AU
NAB chief economist Sally Auld explains why Aussies will see three more rate cuts in 2025 after RBA cut cash rate in May
NAB's chief economist Sally Auld has explained why Aussies could be in line for three more rate cuts this year after the Reserve Bank of Australia delivered its second. The RBA on Tuesday lowered the cash rate from 4.1 per cent to 3.85 per cent in a move largely predicted by money markets. It follows the cash rate being held at 4.35 per cent for almost 18 months as the RBA engineered a 'soft landing' from high post-pandemic inflation. Ms Auld said the reduction of inflation, economic uncertainty from the US-instigated trade war and lacklustre consumer spending meant the central bank would take a 'neutral policy setting'. This means the RBA is taking the middle ground between a restrictive approach, which would see it hold or hike rates, or a stimulatory approach, which means many more rate cuts that would be used if the economy deteriorated. The central bank took the second approach in early 2020 when it reduced the cash rate to 0.1 per cent. 'At NAB, we think (the RBA is) probably going to choose that middle path and actually anchor towards a neutral policy setting and on our estimates, that's another three rate cuts from now,' Ms Auld told Sky News Business on Wednesday. After the new rate cut comes into effect, an Aussie with the average owner-occupier home loan of $659,920 would save $213 monthly and $2,553 annually compared to their repayments in 2024, according to comparison site Finder. Many economists and banks are predicting two more 0.25 per cent rate cuts this year, bringing the total monthly savings to $420 and $5,044 annually compared to last year. If NAB's forecast is correct, the savings could be around $6,300 per year for an average household. Commonwealth Bank of Australia and Westpac are each expecting two more 0.25 per cent interest rate cuts in 2025 to bring the cash rate down to 3.35 per cent. ANZ is expecting three consecutive cuts including the May call, bringing the cash rate to 3.35 per cent in August. RBA Governor Michele Bullock said the central bank's decision was a "confident cut", but noted she remained on watch for economic uncertainty from the global trade war. "I think it's a confident cut in the sense that we think this is the right decision at this point in time," Ms Bullock told reporters after her decision. "Where this leads us in the future is a little more uncertain. I'd have to say probably a lot more uncertain, given everything that's going on."
Business Recorder
05-05-2025
- Business
- Business Recorder
Australian dollar perched at five-month top, outlook brightens
SYDNEY: The Aussie hit a five-month peak on Monday on the back of a soft US dollar, which has been constrained by a meteoric rise in the Taiwanese currency, while the kiwi also gained ground ahead of the quarterly jobs data this week. There has been muted reaction to the astonishing win of the centre-left Labor Party in Australia on Saturday, which would allow the government more scope to pass legislation and ramp up fiscal spending if the US trade war poses any threat to the economy. The Aussie hit a five-year top of $0.6481, although it pared some gains and was last up 0.3% at $0.6460. It also breached key resistance of the 200-day moving average at $0.6457 in a bullish move. The kiwi dollar nudged up 0.4% to $0.5969, after ending last week with a small drop of 0.3%. It remains still short of the recent peak of $0.6029 which is the near-term resistance. In the broader market, the US dollar was losing ground as a meteoric surge in its Taiwanese counterpart spilled over elsewhere, fuelling speculation some Asian countries were prepared to engineer revaluations to win US trade concessions. Down Under, the National Australia Bank revised up its outlook for the Australian dollar, forecasting that it would rise to 70 cents by the year end, mostly due to a weaker US dollar. Australia, NZ dollars perk up on hopes for US-China progress Sally Auld, chief economist at NAB, expects the government's share of economic activity in Australia to increase over the next three years as Labor is likely to take the election result as a strong mandate. 'However, we expect the government's agenda to proceed largely as it has in the first term; that is, relatively cautiously and adhering to a 'no surprises' policy,' said Auld. This week's economic calendar in Australia is a bit thin, but New Zealand will publish its quarterly jobs data on Wednesday where expectations are for a further tick up in the unemployment rate to 5.3% from 5.1% in the fourth quarter. The Reserve Bank of New Zealand will also publish its biannual Financial Stability Report on Wednesday. The central bank is 75% priced to cut interest rates by another quarter-point later this month, with a total of three more cuts expected this year.
Yahoo
05-05-2025
- Business
- Yahoo
Major bank doubles down on supersized RBA interest rate cut call: ‘Catch up'
NAB has doubled down on its prediction that the Reserve Bank of Australia (RBA) will fire off a double interest rate cut at its May meeting in a few weeks' time. The major bank is expecting five cuts are still to come in this rate-cutting cycle, with the central bank needing to 'catch up' with recent global developments. NAB expects the RBA will cut the cash rate by 50 basis points in May, followed by 25 basis point cuts in July, August, November and February. This would take the cash rate down to 2.60 per cent and shave an estimated $526 off monthly repayments for the average $600,000 loan. NAB chief economist Sally Auld said RBA needs to take policy to a more neutral stance 'relatively quickly'. RELATED Commonwealth Bank issues RBA interest rate cut warning for mortgage holders Tax cuts, HECS debts, Medicare boost: All the major cost-of-living relief coming for millions of Aussies Centrelink Work Bonus offers $4,000 boost to pensioners'If the RBA knew on 1 April what it knows today, it is likely that the Board would have decided to lower the cash rate by 25 basis points at the last meeting and followed up that easing up with a 25 basis point rate cut in May,' she said. 'There is thus some catch up required to align policy settings with recent developments … Indeed, the RBA has historically shown a willingness to respond quickly to offshore shocks.' The major bank noted its forecasts would look 'very similar' to how the RBA responded to the Global Financial Crisis and the COVID-19 pandemic. Auld noted the latest inflation data showed both headline and core inflation were within the RBA's 2 to 3 per cent target band. 'This should ease any lingering concerns the RBA has about the inflationary impact of current labour market dynamics,' she said. Auld acknowledged the RBA would need to 'shift its thinking on a couple of fronts' for its call to eventuate. That includes acknowledging the risks to inflation were no longer balanced, taking a "less cautious approach" to policy and showing 'a willingness to act quickly and boldly". The major bank has revised its GDP forecast down by 25 basis points to 2 per cent and lifted its forecast peak in the unemployment rate from 4.2 to 4.4 per cent. A 50 basis point rate cut in May would save the average borrower $181 on their repayments based on a $600,000 loan with 25 years remaining, according to Canstar. A drop of 1.50 per cent by March 2026, as NAB has predicted, would lower repayments by $526 for the same borrower. Commonwealth Bank, Westpac and ANZ expect the RBA will cut interest rates by the standard 25 basis points in May. CBA head of Australian economics Gareth Aird said the latest inflation data was 'a touch firmer' than it expected and a May cut, though likely, was 'not a done deal'. 'The case to normalise the cash rate to a more neutral setting remains, but we maintain that the Board will take a gradual approach in cutting rates despite CBA recently downgrading its forecast for the global economy,' he said. 'We retain our base case that the pace of easing is likely to be gradual and we continue to expect one 25 basis rate decrease each quarter in 2025 for an end year cash rate of 3.35 per cent.' Westpac economist Justin Smirk said the inflation data also exceeded its expectations but had not impacted its base case for a May rate cut. 'Westpac Economics expects three more rate cuts totalling 75 basis points, including one in May, with additional cuts expected in August and November,' he said. ANZ senior economist Adelaide Timbrell said the trimmed mean inflation data had cleared the way for a 0.25 per cent cut in May. "We view an RBA rate cut of 25 basis points in May as a near certainty, given the downside risks to global and domestic growth stemming from global trade policy uncertainty and the inflation outcomes over the past two quarters,' she said. ANZ economists are expecting three cuts in May, July and in to access your portfolio
The Independent
17-03-2025
- Automotive
- The Independent
Australian GP chief gives verdict on F1 night race in Melbourne
The Australian Grand Prix will not switch to a night race in the near future, confirmed CEO of the event Travis Auld. Albert Park hosted the season-opening race of the F1 season for the first time since 2019 this year, with Lando Norris winning a chaotic and action-packed grand prix in the rain. But while the 3pm (local) start time is convenient for audiences in Australia and Asia, fans in the UK had to wake up at 4am (GMT) on Sunday to watch the race, with anticipation high for Lewis Hamilton 's Ferrari debut. The inconvenience of the start time for European fans has led to suggestions the street circuit could host a night race in the future – with similarities to night sessions at tennis's Australian Open – but Aus GP Corporation boss Auld insists the current schedule works well for the event, the spectators and the sport itself. 'I've had these conversations with Formula One,' said Auld, when asked by The Independent about the prospect of a night race in the future. 'There used to be a lot more pressure for a night race, purely because of the European bias of the calendar. As the calendar has grown and broadened, I'm not sure that's the case as much anymore. 'And in fact, I think we share the view with F1, that this event works pretty well during the day with the backdrop of the city. So, at the moment, we don't have any great reason to consider changing the time.' The popular Melbourne race, in 2023, started at 4pm local time – 6am in the UK, after the clocks changed prior to the April race – but was altered last year due to an extended, red flag-impacted race 12 months prior, when the low sun in the evening impacted the visibility of the drivers. With the race having a contract with F1 until 2037, Auld did not rule out a move of the start time to help European fans in the future, saying: 'There's a whole lot of factors that go into the timing of it: the overall track schedule, what time of year it is, the impact on daylight saving and so there's a series of things that need to be considered. 'If we could move the time around, because it worked better for everyone, of course we would do that. It's just not as simple as picking a time that might work for one fan.' This year's event in Melbourne set a new record of 465,498 fans over four days – the highest attendance on record at Albert Park. Silverstone has the modern-day record for the highest attendance, at 480,000 in 2023 and 2024, while the final Australian GP in Adelaide in 1995 hosts the all-time F1 record at 520,000. The second race of the 2025 season takes place this weekend with the Chinese Grand Prix, and the first sprint weekend of the season, in Shanghai.
