Latest news with #MicheleBullock
AU Financial Review
an hour ago
- Business
- AU Financial Review
ASX to fall, but week hinges on RBA speech and Wall Street earnings
The ASX is poised to open lower, but investors hope a dovish sentiment in Reserve Bank of Australia minutes and a speech from governor Michele Bullock will lock in a rate cut next month and drive markets higher. The local stockmarket's performance will also be heavily influenced by a string of results from major global companies including Alphabet and Tesla, which will set the direction of Wall Street and drive Australian shares.
The Advertiser
2 hours 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
3 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.
Sydney Morning Herald
10 hours ago
- Business
- Sydney Morning Herald
Why do we keep expecting rate cuts, even when the RBA tells us not to?
When the Reserve Bank of Australia said it would cut interest rates in February, you could almost hear the entire country sigh in relief. At the time, mortgage holders had endured 13 interest rate hikes since May 2022, and the cash rate had sat at 4.35 per cent since November 2023. Even though the February rate cut was 'just' 0.25 per cent, it was welcome. To many – economists and financial experts, in particular – it was also a sign of things to come. When another rate cut followed in May, it all but confirmed the belief that a steady trimming of rates lay ahead, and indeed, going into last week's RBA meeting, the financial market was giving a 96 per cent chance of another cut. As we all know, that didn't happen, and many people – especially those who were predicting a cut – were very unhappy. While the disappointment was understandable, I found the shock that poured out after the announcement frankly baffling. At the February press conference by Governor Michele Bullock after the first interest rate cut in almost two years was announced, someone asked if Australian households could expect consecutive cuts throughout the rest of the year. If you rewind and look at what she said, it's clear the governor warned us all – pretty strongly – that we shouldn't get our hopes up. She called the prospect of consecutive cuts 'unrealistic', and added that 'the market is expecting quite a few more interest rate cuts by the middle of next year; about three more on top of this. Whether or not that eventuates is going to depend very much on the data – our feeling at the moment is that that is far too confident'. When suddenly our rate cut daydream was no longer on the table, people understandably were pretty unhappy. As if that were not clear enough, Bullock added: 'I want to be clear that today's decision does not imply that further rate cuts along the lines suggested by the market are coming'. She also said: 'We have to be careful not to get ahead of ourselves'. There are some very valid reasons for why experts were caught off guard by last week's decision (namely, the jobs figures, which many now see as proof the decision by the RBA and Bullock was wrong).
The Age
10 hours ago
- Business
- The Age
Why do we keep expecting rate cuts, even when the RBA tells us not to?
When the Reserve Bank of Australia said it would cut interest rates in February, you could almost hear the entire country sigh in relief. At the time, mortgage holders had endured 13 interest rate hikes since May 2022, and the cash rate had sat at 4.35 per cent since November 2023. Even though the February rate cut was 'just' 0.25 per cent, it was welcome. To many – economists and financial experts, in particular – it was also a sign of things to come. When another rate cut followed in May, it all but confirmed the belief that a steady trimming of rates lay ahead, and indeed, going into last week's RBA meeting, the financial market was giving a 96 per cent chance of another cut. As we all know, that didn't happen, and many people – especially those who were predicting a cut – were very unhappy. While the disappointment was understandable, I found the shock that poured out after the announcement frankly baffling. At the February press conference by Governor Michele Bullock after the first interest rate cut in almost two years was announced, someone asked if Australian households could expect consecutive cuts throughout the rest of the year. If you rewind and look at what she said, it's clear the governor warned us all – pretty strongly – that we shouldn't get our hopes up. She called the prospect of consecutive cuts 'unrealistic', and added that 'the market is expecting quite a few more interest rate cuts by the middle of next year; about three more on top of this. Whether or not that eventuates is going to depend very much on the data – our feeling at the moment is that that is far too confident'. When suddenly our rate cut daydream was no longer on the table, people understandably were pretty unhappy. As if that were not clear enough, Bullock added: 'I want to be clear that today's decision does not imply that further rate cuts along the lines suggested by the market are coming'. She also said: 'We have to be careful not to get ahead of ourselves'. There are some very valid reasons for why experts were caught off guard by last week's decision (namely, the jobs figures, which many now see as proof the decision by the RBA and Bullock was wrong).
