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12 Aug 2025

RBA cuts, US inflation contained

• US CPI. Not as bad as feared US inflation supported sentiment overnight. US equities rose, as did US rate cut expectations. USD softer. AUD rebounded.• RBA change. RBA finally delivered another 25bp rate cut yesterday. A few more moves look to be in the pipeline based on the RBA’s new forecasts.• Data flow. AU wages out today & jobs report due tomorrow. China data released on Friday. US producer prices & retail sales on the radar later this week. Global Trends The latest read on US CPI inflation was in focus overnight and another ‘not as bad as feared’...

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RBA: (finally) a bit more relief

After defying expectations by holding interest rates steady in July the RBA (finally) announced some more ‘relief’ for indebted households/businesses at today’s meeting. The RBA lowered the cash rate by 25bps to 3.60% with the Board voting unanimously (i.e. 9-0) in favour of the move. This is the 3rd reduction since February and was widely anticipated given the RBA noted last time that the decision to stand still was one of “timing not direction”. In our opinion, domestic inflation and labour market trends point to a further recalibration lower in interest rates towards “neutral” (which in our judgement is a...

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