Market snapshot
Wall Street: Dow Jones (-0.3%), S&P 500 (-0.4%), Nasdaq (-0.4%)Europe: FTSE (+0.9%), DAX (+0.4%), Stoxx 600 (+0.7%)Spot gold: +1.9% to $US3,290/ounce
Brent crude: +0.1% at $US65.63/barrelIron ore: flat at $US99.50/tonneBitcoin: +1.4% at $US106,937
Prices current around 7am AEDT
13m agoTue 20 May 2025 at 10:01pm
Higher chance of interest rate cuts due to growing economic risks, says Barrenjoey chief economist Jo Masters
The Reserve Bank will probably keep cutting interest rates as the balance of risks have “shifted to the downside”, according to Barrenjoey chief economist Jo Masters.
Donald Trump’s tariff policies could lead to weaker global economic growth, while Australian households are becoming more cautious and spending less in the domestic economy, she said.
Ms Masters said it’s too early to say the war on inflation has been won but Australia has made good progress.
She doesn’t expect the RBA to cut interest rates in July but thinks the central bank will move in August.
You can listen to her interview with The Business host Kirsten Aiken here:
ASX to open higher, despite Wall Street fall
Good morning, and welcome to the ABC’s finance blog!
The local share market is on track to open higher, despite a tech ‘sell-down’ dragging Wall Street lower overnight.
ASX futures are up 0.6%, which indicates a moderate gain for Australian stocks, when trading begins in a few hours.
Meanwhile, the Australian dollar is buying 64.2 US cents (after dropping 0.5%). It fell immediately after the Reserve Bank said it would cut its cash rate target to a two-year low of 3.85% on Tuesday.
The weaker dollar suggests we’re likely to see more interest rate cuts in the months ahead (according to currency traders).
Although inflation is falling more quickly than anticipated, the RBA is increasingly concerned about the “unpredictable” economic impact of US President Donald Trump’s trade policies on the global economy.
Indeed, there was a huge spike in the number of times the central bank mentioned “uncertain” or “uncertainty” (in RBA governor Michele Bullock’s decision statement and the bank’s statement on monetary policy).
On Wall Street, major tech-related stocks dragged the main US indexes lower. The Dow Jones fell 0.3%, while the S&P 500 and Nasdaq lost 0.4% respectively.
The biggest drags on the market were Amazon (-1%), Alphabet (-1.5%), Apple (-0.9%) and Nvidia (-0.9%).