Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
RBA rate decision
The Reserve Bank of Australia (RBA) will deliver its first interest rate decision of the year this week – and it is set to be a critical one.
The general consensus points towards a rate cut but regardless of the outcome, this is the most significant rate decision of the year following a prolonged pause at 4.35%.
Australia is also overdue for the announcement of the 2025 Federal Election date and it appears the Labor Government is waiting for favourable economic news before making its move.
While the government has no direct influence over the RBA’s decision, a rate cut would provide an opportunity to set an election date under the narrative of successful economic management.
The numbers support a cut but RBA Governor Michelle Bullock has not signalled any clear direction ahead of this meeting.
A further pause would likely frustrate Australian businesses and households, possibly prompting the government to call an early election to pre-empt worsening economic conditions.
The RBA’s silence so far this year has fuelled speculation of a rate cut. However, the most critical aspect will be the minutes released after Tuesday’s decision, providing insight into the central bank’s outlook.
AU unemployment
On Thursday, economists and the RBA will closely watch Australia’s unemployment data, hoping for a slight uptick to justify further rate cuts.
While employment numbers have been strong over the past year, data from Seek and NAB suggests a softening job market, with job ads down and application volumes rising.
The RBA prioritises official metrics and unless unemployment climbs meaningfully above 4%, this will remain a key obstacle to further rate reductions.
Earnings season
Australia’s earnings season continues with major mining companies, including BHP, Pilbara Minerals, Rio Tinto and Whitehaven Coal, set to report this week. According to eToro data, Pilbara remains the most-held ASX stock among Australian investors and the third most-held ASX stock globally.
In the tech and telecoms sector, Megaport and Telstra will release earnings, while Wesfarmers will report against the backdrop of the RBA’s rate decision.
Wesfarmers' retail divisions, including Kmart and Bunnings, have already recorded growth, while Officeworks and Priceline are also expected to have performed well.
However, the closure of Wesfarmers’ online retail platform Catch.com.au, struggling against competition from Amazon and Temu, may weigh on its results.