Market snapshot
- ASX 200 futures: +0.2% to 8,514 points
- Australian dollar: +0.1% at 63.5 US cents
- S&P 500: stable at 6,114.6 points
- Nasdaq: +0.4% to 20,026.7 points
- FTSE: +4% to 8,768 points
- EuroStoxx 50: +0.5% to 5,519 points
- Spot gold: +0.5% to $US2,897/ounce
- Brent crude: +0.8% to $US75.32/barrel
- Iron ore: -0.1% to $US106.8/tonne
- Bitcoin: -1.8% at $US95,692
Prices current around 7:30am AEDT.
It’s D-day for the RBA
Hello! While Dan takes us through the market moves from overnight, I’m chiming in nice and early to take us through the big news of the day — which is the RBA’s interest rate decision.
Today is actually the second day of the RBA’s rates meeting, with the board getting together yesterday to thrash out their thinking.
After sleeping on it, the RBA board will be back at it again this morning, before they share their decision with us at 2:30pm AEDT.
As for what they’re expected to do? Well, expectations are overwhelmingly pointing towards an interest rate cut.
Not only would that bring about huge relief for millions of households, it’ll also be welcome news for the federal government, which is fast approaching an election deadline. (But more on that later.)
I’ll be with you throughout the morning to get you up to speed on why an RBA rate cut is looking likely, and political reporter Courtney Gould will join us from Parliament House in Canberra to bring us the political machinations from the day.
Now, if you’ll excuse me…
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US markets closed for Presidents Day
While we’re laser focused on the RBA decision later today, the US market is having a day off for the Presidents Day holiday.
Markets would normally be about to close, instead we’ll see tomorrow if Nvidia surges on the back of a reduced cash rate flowing through to potentially improved consumer spending and business investment in Australia.
Tariff talk dominated most of the week’s headlines – as the US weighed a chaotic ‘whole of world’ series of duties on imports – but investors also too in retail sales figures for January which took an unexpected nosedive after four strong months
It’s here…. your comprehensive coverage of Rates Day begins
Also… good morning!
The board of the Reserve Bank of Australia meets again today, the second day of what is now eight meetings annually.
At 2.30pm AEDT it will release its hotly-anticipated decision on the cash rate target.
In essence it’s the rate that banks use to settle debts with each other, but in reality it’s the benchmark that is used to price the cost of money.
To deal with rising inflation, our central bank went on its steepest-ever cycle of hiking rates, jacking them up and up to attempt to take excess money and ‘heat’ out of the economy, and slow the pace of price rises.
Rates started going up in May 2022 but the most recent lift was to 4.35% in November 2023. Since then the graph of the rate has looked like a tabletop mountain, mounting financial pressure on people with large debts: namely people with mortgages.
The money market consensus is that there will be a 25-basis point cut, taking the rate to 4.1%. Bank economists and the contracts that essentially bet on what will happen are aligned on this position.
But none of those people have a seat at the boardroom table of the Reserve Bank of Australia. So we have to wait until 2.30pm AEDT to get an answer.
Get ready.
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