Josh Gilbert, market analyst at eToro Group Ltd, shares his three things to watch in Australia in the coming days.
RBA rate decision
A rate cut is all but assured for Aussies today, with CPI and unemployment data hitting all the right notes in the preceding months. Consumer confidence is also in a good place now, and fresh NAB Business Confidence data on Tuesday will probably follow the same tune, reflecting a recovering economy that is faring very well against a pretty unpredictable global backdrop.
Three further 25bp cuts are still priced in by analysts, which would take the average Aussie well out of stress territory. The next concern, however, will be the impact on the housing market. Aussie home prices are climbing to record highs, and supply is dwindling, creating an environment of unaffordability even as repayments become reasonable. Without real action on a federal level, we may see the RBA and our government operating at loggerheads, which could start to hurt the economy once more.
Trump's tariff deadline
This Wednesday, July 9, would have marked US President Trump’s big tariff deadline, but an executive order signed overnight has now extended that deadline to August 1, providing trading partners with three more weeks to negotiate.
A central focus here will continue to be Japan, who have been threatened with tariffs ‘up to 35%’ unless they can reach a deal. Japan has remained defiant.
Markets seem to be getting a bit pessimistic about Trump’s big deadlines, and volatility seems set to be a little more subdued compared to the conditions that stretched over April’s saga.
It shouldn’t be surprising to see Trump kick the tariff can further down the road here. Kickstarting fresh global economic turmoil is probably not something the administration wants right now, while also wrestling with the ‘big beautiful bill’ rollout and trying to broker a ceasefire in the Middle East.
Chinese inflation
China’s CPI and PPI figures drop on Wednesday, and will likely embed fact into a plain-to-see narrative already in play, which is that the country’s deflationary conditions continue to provoke concern. Consumer demand is weak and prices continue to fall across most producer levels as price wars on key consumer products rage on.
With US tariffs continuing to loom overhead, meaningful intervention from the government is still needed. In the interim, companies will be keenly watching Alibaba’s $7b consumer subsidy tactic, which will provide cash vouchers, free purchase coupons, and subsidised prices on select items to spur shoppers and revitalise the economy. This could be a golden opportunity for various industries across the countries if it proves successful, but that’s a capital IF and a slip-up here could further hurt morale as Chinese consumer-facing enterprises try desperately to drum up buyer enthusiasm.