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The Advertiser
22 minutes ago
- Business
- The Advertiser
Peek into surprise RBA decision as rate cut on cards
A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700. A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700.
Perth Now
2 hours ago
- Business
- Perth Now
Peek into surprise RBA decision as rate cut on cards
A behind-the-scenes glimpse at the Reserve Bank's shock interest rate decision could offer clues into its next ruling. Borrowers and mortgage holders are still reeling after its board flouted expectations and held the cash rate at 3.85 per cent in July. But the release of tameeting minutes on Tuesday could shine a light on the reasoning and prepare financial markets for the central bank's next decision, which will be handed down on August 12. It was expected to deliver a 25 basis point cut but instead came to a rate hold in a split decision as most board members were awaiting confirmation inflation was heading towards the 2.5 per cent midpoint of its target range. Reserve Bank governor Michele Bullock is also expected to deliver a speech on Thursday that will provide answers for economists and ordinary Australians alike. But many economic analysts believe an unanticipated jump in Australia's unemployment rate will likely force the RBA's hand at its August meeting. The Australian Bureau of Statistics on Thursday revealed the jobless rate had jumped from 4.1 per cent to 4.3 per cent in June, defying market expectations it would hold steady for another month. These figures were the last set of labour force data before the August decision and though many have noted it still reflects a relatively low unemployment rate, it also signals a softening in the market that the Reserve Bank did not expect until the year's end. CreditorWatch's chief economist Ivan Colhoun said it marked a clear miss that made the July rates ruling appear "overly cautious" and that an August cut was "virtually locked in". The increase in unemployment has been attributed to growing global uncertainty, with Treasurer Jim Chalmers pointing to international conflicts and the looming threat of US tariffs. NAB's head of Australian economics Gareth Spence has said the RBA will continue to focus on domestic figures to guide its decision and is expecting cuts in August, November and February - eventually taking the cash rate to 3.1 per cent. "We see the RBA remaining cautious," he said. "The uncertain global backdrop sees a risk of faster and deeper cuts, although the domestic data has remained resilient to date." But given the initial revelations about the July results, other economists like VanEck's head of investments Russel Chesler have stressed the importance of upcoming quarterly inflation figures as a "vital data point" that will determine the RBA's next decision. The federal government is expecting the jobless rate to rise to the "middle fours" but Dr Chalmers maintains a soft landing is still the expectation. Wall Street was meanwhile a little subdued to close the week, amid reports President Donald Trump is pushing for steep new tariffs on EU products. Speculation over a minimum impost of between 15 per cent and 20 per cent in any deal with the European bloc sent US indices lower before a partial recovery on Friday. The S&P 500 lost 0.57 points, or 0.01 per cent, to 6,296.79, and the Nasdaq Composite gained 10.01 points, or 0.05 per cent, to 20,895.66. The Dow Jones Industrial Average fell 142.30 points, or 0.32 per cent, to 44,342.19. Australian share futures plunged 49 points, or 0.56 per cent, to 8,898. However the benchmark S&P/ASX200 index on Friday gained 118.2 points, or 1.37 per cent, to 8,757.2, while the broader All Ordinaries rose 116 points, or 1.3 per cent, to 9,006. The gains were the ASX200's biggest since a 4.5 per cent rally on April 10 and the first time it has crossed 8,700.
New York Post
4 hours ago
- Business
- New York Post
Aussies are traveling to the US in droves, despite Trump's strict border stance: report
There's been a surprising spike in Aussies heading to the US after many were deterred by President Donald Trump's strict border stance and other controversial government policies. According to new data released by the Australian Travel Industry Association (ATIA), travel from Australia to the US increased by 4.8 percent year-on-year and was up 8 percent in May 2025 compared to May 2024. Advertisement Figures from the Australian Bureau of Statistics (ABS) were also up in various categories including traveling on a holiday (up 12 percent compared with last year), visiting friends or relatives (up 15 percent) or for business (up 8 percent). It shows a solid improvement compared to April where there was a 6.2 per cent decline. US inbound travel to Australia, however, slipped by 3.7 percent in May and remained flat year-on-year with a modest 0.6 percent rise. 'The USA remains popular with outbound travelers, but the muted inbound response highlights challenges in achieving a balanced two-way tourism recovery,' ATIA director of compliance and membership, Nina Hedges said. Destinations Aussies are travelling to over the US Advertisement The US continues to take a back seat to destinations like Bali, Japan and Vietnam, which lead the way as Australia's favourite overseas locations. According to recent ATIA figures, for the year ending May 2025, outbound travel surged by 12.5 percent to 12.21 million trips, driven by a strong appetite for travel across Asia. Standout growth included Indonesia (Bali) up 16.3 percent, Japan, up 32.4 percent, Vietnam, up 25.8 percent and China, up 26.9 percent. 3 More Australians are heading to the United States despite being previously affected by President Donald Trump's strict border policies. AFP via Getty Images Advertisement 'Asia continues to shine as the preferred playground for Australian travellers, with Bali, Tokyo and Ho Chi Minh City topping itineraries for millions,' Ms. Hedges said. Japan specifically continues to see a growth in visitor numbers thanks to expanded flight options and the region's strength with the AUD, allowing it to stretch further for accommodation, dining and shopping. 'Australia's love affair with America could fade' Flight Centre chief executive and founder Graham Turner told that in the first three months of 2025, leisure bookings to the US from Australia dropped about 12 to 15 percent compared to last year, while business travel remained 'on par'. But he anticipated the decline to 'accelerate' for both leisure and business travel across April, May and June. Advertisement June figures are yet to be released. Meanwhile, Sarah Megginson, a personal finance expert at Finder, previously said perceptions of hostility and the current political climate 'could see Australia's love affair with America fade.' She warned Australians to check their travel insurance policies carefully before going to the US as many insurers would not provide cover if you are denied entry at the border. 3 Data released from the Australian Travel Industry Association (ATIA) shows travel from Australia to the US increased by 8% in May of 2025, compared to the same time a year ago. WILL OLIVER/EPA/Shutterstock There's been reported cases of tourists being denied entry on arrival and at times, strip searched and thrown in prison. It comes as the US maintains strict immigration rules with significant emphasis on border security and entry eligibility. 'With tensions rising on American soil, Australians are rethinking holidays to the US at the moment,' Ms. Megginson told in June. 'There's growing sentiment among Australians that the potential issues that could arise when visiting the US are beginning to outweigh the appeal of visiting some of our favorite cities. Advertisement 'My husband recently got back from a week in Los Angeles, and he noticed a huge shift from previous visits: he was questioned in detail about all aspects of his trip and why he was travelling alone. 3 Data from the Australian Bureau of Statistics (ABS) also shows holiday travel to the U.S. went up by 12% compared to 2024. AFP via Getty Images 'It was a really hostile welcome, and if travellers feel they're being treated like suspects at the border, they'll simply take their travel dollars elsewhere.' Meanwhile, according to Finder survey results, it appears older Australians are less likely to be deterred by what is happening politically in the US, with this age group actually traveling to the States more on Intrepid trips this year than they did last year. Advertisement Leigh Barnes, who is the company's managing director of the Americas, told his team had increased their focus on domestic travel within the US, promoting the right products at the right time, and increasing their brand presence. Canadians visiting the US plummets Other visitors from other countries aren't so enthusiastic about the US with Canada – the country's biggest market for international visitors – having plummeted more than 14 percent, according to the US International Trade Administration, with almost a million fewer Canadians so far in 2025 compared to last year. Visitors from other countries, such as China, South Korea and Germany, have also declined. The drop in Canadian figures come as then-Canadian Prime Minister Justin Trudeau told Canadians not to spend holiday dollars in the US after Mr. Trump's talks about tariffs and referring to Canada as 'the 51st state' in February. Advertisement He repeated that call to action until he left office in April. Forbes reported that three-quarters of Canadians who had previously planned a trip to the US say the tariff announcements influenced their plans. Over half (56 percent) of those who had been planning to visit the US have since decided to travel elsewhere, according to a survey by Leger Marketing of over 1,500 Canadian adults fielded mid-May. Advertisement Tourism Economics, which forecasts foreign traveller arrivals in the states, said the US is looking at a significant nine per cent drop in international arrivals for 2025, and a drop of $US8.5 billion – $A13 billion (-4.7 percent) in international visitor spending compared to last year. The travel data company's May report cited factors contributing to the negative outlook include Mr Trump's administration posturing and policy announcements, such as 'Liberation Day' tariffs across longstanding trade partners.
Sky News AU
a day ago
- Business
- Sky News AU
RBA 'made a mistake' with shock interest rate hold, KPMG's Brendan Rynne declares after unemployment rate rises in June
A leading economist has torn into the Reserve Bank of Australia's recent decision to hold the cash rate after it was revealed the unemployment rate rose in June. Fresh data from the Australian Bureau of Statistics showed the unemployment rate rose 0.2 per cent to 4.3 per cent after it sat near historic lows following the pandemic. The unemployment rate is a critical piece of data for the RBA's cash rate decision, and a rise would typically mean the central bank would lower rates. After the central bank held the cash rate at 3.85 per cent, despite money markets overwhelmingly factoring in a 0.25 per cent cut, many lashed out over the shock decision. The fresh jobs data led to heightened backlash, with KPMG's chief economist Brendan Rynne joining the chorus during an appearance on Sky News Business Now. "I think they made a mistake in keeping the cash rate at 3.85 per cent," Mr Rynne said. "The risk associated with dropping that cash rate down - in terms of getting an inflation bounce compared to providing some support into the private side of the economy - we think that risk trade-off is one that should have been associated with the dropping the cash rate down to 3.6 per cent. "In the next meeting, we know that the Reserve Bank was saying it's not a matter of if rates are going to drop, it's just going to be a matter when rates drop. "We fully expect now that 25 basis points to come off at the next meetings." After holding the rate earlier this month, RBA governor Michele Bullock said the decision was due to "timing" as it awaited further data on inflation. 'The board decided to wait a few weeks to confirm that we're still on track to meet our inflation and employment objectives," she told reporters after the decision. Mr Rynne predicted annual trimmed mean inflation - the middle 70 per cent of price changes core to the RBA's decision - would come in a 2.5 per cent for the June quarter, which is in the RBA's target band. He did forecast headline inflation - which examines everything in the ABS' consumer price index - will shift as government rebates phase out. "Headline inflation will bounce over the remainder of this year, coming back up a little as the full effect of the electricity rebates and cost of living rebates start to roll off," "Notwithstanding those, we do think that that inflation is still pretty weak, particularly goods inflation, and it's going to be that further rolling off of services inflation that's going bring it down in total." If the RBA had cut rates in July, it would have been the first consecutive rate cut since the central bank delivered an emergency cut in 2020 during the onset of the pandemic. Every major bank forecasted a 25 basis point cut in July while money markets at one pointed priced in a 99 per cent chance of a cut. If the RBA is to cut rates in August, it will be the third rate cut this year and will bring the cash rate down to 3.6 per cent.
Sky News AU
2 days ago
- Business
- Sky News AU
Australia's 'most financially cautious' shoppers are people aged between 18 and 24 as rising cost of living bites youth
The cost of living crisis in Australia has left its mark on all generations, but young people appear to be taking it more seriously in terms of how they spend their money, according to new data. The 2025 ANZ Online Shopping Report revealed those aged between 18 and 24 prefer to pay with debit cards when shopping online, the highest usage rate (53 per cent) among all age groups. The report showed that credit cards were on the decline in general, indicating an overall change in attitude towards how payments are made by consumers in the current economy. Shannon Ingrey, Vice President and General Manager, APAC at BigCommerce said the preference to use existing funds over credit suggested a "strong desire" for people to "stay in control of their finances". He also said the younger generation had grown up in a time of economic uncertainty that prepared them to make more careful financial decisions in general. "Aussie shoppers, including Gen Z, are also engaging with ecommerce features that help them manage their spending. According to our research, 59 per cent of shoppers value automated price tracking tools, while 49 per cent favour personalised recommendations," Mr Ingrey told "These behaviours point to a generation that has grown up in a post-Global Financial Crisis world where financial caution is not a reaction to change, but a baseline. "For many, managing money with care is all they've ever known and this mindset now shapes how they shop, what they prioritise, and what they expect from brands." According to the Australian Bureau of Statistics (ABS), the Living Cost Indexes in Australia rose between 2.4 and 3.5 per cent over the 12 months to the March 2025 quarter. Health, housing and food and non-alcoholic beverages were the key contributors driving the living cost indexes upwards. Mr Ingrey said the caution from Gen Z shoppers is "shaped by both the economic climate and the values they bring to how they shop". "While younger Australians are digital natives, their behaviour shows a clear focus on practicality and value," he said. 86 per cent of young people are also favouring free shipping as their preferred loyalty reward, indicating the desire to take advantage of discounts when possible, while 97 per cent say the cost of shipping is a key barrier to them making a purchase. "Gen Z shoppers are less motivated by generic discounts and are looking for consistent value through relevant offers, smooth checkout experiences, and delivery choices that work for them," Mr Ingrey said. "Their behaviour reflects a mindset that values control, transparency, and thoughtful spending at every stage of the purchase journey."
