RBA set to cut rates; auctions boom; PM ruffles feathers

RBA set to cut rates; auctions boom; PM ruffles feathers

News in brief

The outlook for rates seems to be helping auctions, with the preliminary clearance rate across the capital cities coming in at 73.1pc, according to Cotality. Melbourne is leading the way at 75.5 per cent. The city has now recorded clearance rates above 70 per cent for 10 straight weeks, and above 75 per cent for the past three.

 

Australia has just recorded its worst year for corporate insolvencies, with 14,105 businesses going under in FY25 as companies faced rising costs, weaker demand, and a tougher stance from the ATO.

 

Prime Minister Anthony Albanese has signalled a more independent Australian foreign policy in a major speech, declaring that ‘our fate will be decided in our region.’ He heads to China later this week to meet with President Xi Jinping.

 

Billionaire Elon Musk has followed through on his threat to set up a new political party, after US President Donald Trump officially signed the One Big Beautiful Bill Act into law over the weekend. Mr Musk ran a poll on social media platform X, before announced he was forming the 'America Party.' 

Debenture seats at Wimbledon have become something of a hot-ticket financial asset, with wealthy tennis fans reportedly shelling out more than £200,000 ($415,000) for courtside seats in the 2026–2030 period.

Fear-o-meter

The Reserve Bank is set to cut interest rates for the third time this year, with two more likely by the time 2025 is over.

 

Central bank Governor Michele Bullock all last year and into this year said slaying the inflation dragon was the prime objective, and Australians will reap the benefits later on.

 

It is now “later on”.

 

The economy is growing at a tepid 1.3 per cent pace, less than half the long term trend pace. GDP per capita last quarter slowed again – that’s eight quarters in the last three years where per capita growth has slowed.

 

Inflation is running at 2.1 per cent and underlying inflation is at 2.4 per cent – both under the mid-point of the RBA ’s target band.

 

Jobs growth and unemployment rates are stronger in comparison but falling job advertisement figures indicate some more deterioration from here. Finally, retail sales and building approvals have both slowed, contrary to expectations for increases.

 

The question is not so much will we get cuts, but how many will we get?

Who's talking today?

On risks for investors, opportunities in emerging markets, and why VanEck sees the next quarter outlook as being 'clear as mud':

 

"There's a lot of market exuberance at the moment, and that's reflected through the rally we've seen of late and valuations. I guess the key risk to really consider is certainly the ongoing tariff discussions. And we know that obviously the global economy has really got a baseline 10%. Now there's a trade deal... announced with the UK. It looks like Europe's in a good place, from what we're hearing so far, which is positive. But having said that, those will have an impact, particularly on the US in terms of inflation. And we're starting to see that when you look at some of the underlying data... in particular, prices paid, that has picked up. So if you take that on face value, I think the back end of the year could be a bit more turbulent than what the market seems to suggest."

It’s Monday the 7th of July, and the start of a big week for the economy. The Reserve Bank board meets today and tomorrow, and is widely tipped to cut interest rates for the third time this year. The deliberations follow a surprisingly low inflation number for May, as well as very weak retail sales and building approvals data. Plus the economy itself is running at a sluggish one-and-a-half per cent pace.

Greed-o-meter

Round	Prize Money (£)
Winner	3,000,000
Runner-up	1,520,000
Semi-Finalists	775,000
Quarter-Finalists	400,000
Fourth Round	240,000
Third Round	152,000
Second Round	99,000
First Round	66,000

Forwarded from a friend? Sign up to our daily newsletter

The story above about courtside seats at Wimbledon got us thinking about tennis, and how much players stand to win at the All England Lawn Tennis Club. And this is only the tip of the iceberg, with the real money flowing from sponsorship deals. (Having said that, we wouldn't complain if we won three million pounds on centre court).

Listen to today's episode 🎧 

Source: wimbledon.com