Overview

• On Tuesday the Reserve Bank of Australia reduced its cash rate by 25 basis points, with Governor Michele Bullock saying some labour-market indicators have eased even as pockets of tightness remain.
• Markets forecast the July unemployment rate will fall back to about 4.2%, reversing June’s spike that economists attribute partly to a rotating sub-sample in the ABS survey.
• Official Wage Price Index data showed annual wages growth of 3.4%, outpacing the RBA’s 3.3% forecast and tempering expectations for rapid further rate cuts.
• The RBA signalled that a materially weaker July jobs print would strengthen the case for another rate cut in September, while stronger employment and wages would prompt more cautious easing.
• Longer-term challenges include Deloitte’s warning of slowing employment growth through 2025 due to weak productivity and ASIC’s review of RG 97, which could unlock about $8.7 billion for institutional housing investment and support 35,000 new homes.