Interest rate cut tipped despite Trump tariff backdown

A clear majority of economists believe the Reserve Bank of Australia will cut interest rates at its next meeting, but developments abroad mean it's no longer a sure thing.
US President Donald Trump recently slashed tariffs on China to 35 per cent from a whopping 145 per cent, prompting Beijing to lower its own tariff wall and triggering a rebound in values for riskier assets such as shares.
Following strong labour market data released on Thursday, the market now predicts three rate cuts by year's end, down from four priced in at the start of the week.
But traders are still nearly fully priced in for a 25 basis point cut to the cash rate, which sits at 4.1 per cent, on Tuesday.
Almost nine in 10 economists agreed in a survey by comparison website Finder.
Oxford Economics Australia's Sean Langcake is among the vast majority of the 41 economists surveyed who predict a cash rate reduction.
Despite better news on the tariff front, the economy would still be negatively impacted by the "uncertainty shock", he said.
"With upside inflation risks dissipating, the RBA can afford to lend the economy some more support," Mr Langcake added.
Economists at all four big banks also expect a cut, with NAB still holding onto its prediction of a turbocharged 50 basis point cut.
Nomura analysts Andrew Ticehurst and David Seif said the case for an "aggressive" 50-point cut was relatively weak, given the detente in the Sino-American trade war.
"We expect the RBA to deliver a 25 basis point rate cut, reflecting both further welcome progress in returning core inflation back towards target and the continuing highly uncertain global backdrop," the pair said.
The central bank will also update its quarterly economic predictions on Tuesday in an otherwise quiet week on the data front.
The Victorian government will unveil its budget on the same day, with ratings agency S&P Global warning the nation's most indebted state to rein in spending or risk seeing its AA credit rating downgraded further.
Meanwhile, US markets were buoyed by the tariff reprieve, rising for their fifth day in a row by the end of the week.
Australian shares reached a three-month high on Friday after eight straight sessions of gains.

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The Advertiser

an hour ago

• The Advertiser

Long way to go to stop lending for deforestation

Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses. Two years on from the Australian Conservation Foundation's first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress. Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia's international commitments to halt and reverse biodiversity loss. Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP. Mature trees are important for soil integrity, she said, as well as protection from extreme weather. Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank. Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs. The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023. Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising "serious questions about due diligence or, worse, wilful ignorance". Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. "Our analysis shows banks still have a long way to go to mitigate the risks - and seize the opportunities - associated with their impacts and dependence on nature," Ms van Herwaarden said. NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country. A spokesperson said the bank was addressing many of the report's recommendations, including doing more to engage stakeholders and investing in geospatial tools. "NAB is Australia's largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders," the spokesperson said. As well as calling on banks to commit to eliminating deforestation from their lending portfolios - a move already taken by Westpac - the environmental group also wants government to step up. A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws. Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks. Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses. Two years on from the Australian Conservation Foundation's first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress. Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia's international commitments to halt and reverse biodiversity loss. Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP. Mature trees are important for soil integrity, she said, as well as protection from extreme weather. Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank. Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs. The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023. Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising "serious questions about due diligence or, worse, wilful ignorance". Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. "Our analysis shows banks still have a long way to go to mitigate the risks - and seize the opportunities - associated with their impacts and dependence on nature," Ms van Herwaarden said. NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country. A spokesperson said the bank was addressing many of the report's recommendations, including doing more to engage stakeholders and investing in geospatial tools. "NAB is Australia's largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders," the spokesperson said. As well as calling on banks to commit to eliminating deforestation from their lending portfolios - a move already taken by Westpac - the environmental group also wants government to step up. A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws. Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks. Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses. Two years on from the Australian Conservation Foundation's first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress. Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia's international commitments to halt and reverse biodiversity loss. Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP. Mature trees are important for soil integrity, she said, as well as protection from extreme weather. Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank. Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs. The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023. Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising "serious questions about due diligence or, worse, wilful ignorance". Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. "Our analysis shows banks still have a long way to go to mitigate the risks - and seize the opportunities - associated with their impacts and dependence on nature," Ms van Herwaarden said. NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country. A spokesperson said the bank was addressing many of the report's recommendations, including doing more to engage stakeholders and investing in geospatial tools. "NAB is Australia's largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders," the spokesperson said. As well as calling on banks to commit to eliminating deforestation from their lending portfolios - a move already taken by Westpac - the environmental group also wants government to step up. A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws. Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks. Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses. Two years on from the Australian Conservation Foundation's first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress. Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia's international commitments to halt and reverse biodiversity loss. Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP. Mature trees are important for soil integrity, she said, as well as protection from extreme weather. Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank. Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs. The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023. Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising "serious questions about due diligence or, worse, wilful ignorance". Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. "Our analysis shows banks still have a long way to go to mitigate the risks - and seize the opportunities - associated with their impacts and dependence on nature," Ms van Herwaarden said. NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country. A spokesperson said the bank was addressing many of the report's recommendations, including doing more to engage stakeholders and investing in geospatial tools. "NAB is Australia's largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders," the spokesperson said. As well as calling on banks to commit to eliminating deforestation from their lending portfolios - a move already taken by Westpac - the environmental group also wants government to step up. A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws. Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks.

Perth Now

2 hours ago

• Perth Now

Long way to go to stop lending for deforestation

Australian banks have been slow to trim exposure to deforestation, with big agribusiness players still found to be lending to bush-bulldozing businesses. Two years on from the Australian Conservation Foundation's first foray into the financing of destructive land clearing, a follow-up report points to sluggish progress. Destruction of bushland for grazing, real estate and other development contributes to climate change and threatens species, such as the endangered pink cockatoo, as well as undermining Australia's international commitments to halt and reverse biodiversity loss. Deforestation also poses material risks to banks, ACF corporate responsibility policy analyst Audrey van Herwaarden told AAP. Mature trees are important for soil integrity, she said, as well as protection from extreme weather. Landowners with poorer soil and less productive land are more likely to miss repayments, manifesting as a credit risk to the bank. Reputational risk are also at play, with landowners caught land clearing illegally forced to pay steep remediation costs. The five big agribusiness players, ANZ, Westpac, Commonwealth Bank, National Australia Bank and Rabobank, were linked to cases of deforestation via mortgages over land titles in the 12 months from July 2023. Bank loans through securities on title are a common method for financing deforestation but the environmental group stressed it could not be certain the loans were used for bulldozing. Several mortgages were issued or reissued during or after the destructive landclearing had taken place, raising "serious questions about due diligence or, worse, wilful ignorance". Nearly half the cases might have been in breach of federal nature laws and the environment group had reported them to the relevant department. "Our analysis shows banks still have a long way to go to mitigate the risks - and seize the opportunities - associated with their impacts and dependence on nature," Ms van Herwaarden said. NAB, a major agribusiness lender, was twice as exposed as its peers across the 100 cases of deforestation from around the country. A spokesperson said the bank was addressing many of the report's recommendations, including doing more to engage stakeholders and investing in geospatial tools. "NAB is Australia's largest lender to agriculture and we understand deforestation is a complex issue that requires collaboration across government, industry and landholders," the spokesperson said. As well as calling on banks to commit to eliminating deforestation from their lending portfolios - a move already taken by Westpac - the environmental group also wants government to step up. A national strategy to end deforestation by 2030 is a key request, as well as executing on long-delayed reforms to broken nature laws. Both Commonwealth Bank and ANZ pointed to their social and environmental policies that dictate how they support their customers to manage deforestation risks.

7NEWS

5 hours ago

• 7NEWS

FedEx founder Fred Smith dies at 80

Fred Smith, the FedEx Corp founder who revolutionised the express delivery industry, has died, the company said. He was 80. FedEx started operating in 1973, delivering small parcels and documents more quickly than the postal service. Over the next half-century, Smith, a Marine Corps veteran, oversaw the growth of a company that became something of an economic bellwether because so many other companies rely on it. Memphis, Tennessee-based FedEx became a global transportation and logistics company that averages 17 million shipments per business day. Smith stepped down as CEO in 2022 but remained executive chairman. Smith, a 1966 graduate of Yale University, used a business theory he came up with in college to create a delivery system based on coordinated air cargo flights centered on a main hub, a 'hub and spokes' system, as it became known. The company also played a major role in the shift by American business and industry to a greater use of time-sensitive deliveries and less dependence on large inventories and warehouses. Smith once told The Associated Press that he came up with the name Federal Express because he wanted the company to sound big and important when in fact it was a start-up operation with a future far from assured. At the time, Smith was trying to land a major shipping contract with the Federal Reserve Bank that didn't work out. In the beginning, Federal Express had 14 small aircraft operating out of the Memphis International Airport flying packages to 25 US cities. Smith's father, also named Frederick, built a small fortune in Memphis with a regional bus line and other business ventures. Following college, Smith joined the US Marines and was commissioned a second lieutenant. He left the military as a captain in 1969 after two tours in Vietnam where he was decorated for bravery and wounds received in combat. He told The Associated Press in a 2023 interview that everything he did running FedEx came from his experience in the Marines, not what he learned at Yale. Getting Federal Express started was no easy task. Overnight shipments were new to American business and the company had to have a fleet of planes and a system of interconnecting air routes in place from the get-go. Though one of Memphis' best-known and most prominent citizens, Smith generally avoided the public spotlight, devoting his energies to work and family. Despite his low profile, Smith made a cameo appearance in the 2000 movie Cast Away starring Tom Hanks. The movie was about a FedEx employee stranded on an island. 'Memphis has lost its most important citizen, Fred Smith,' said US Rep Steve Cohen of Tennessee, citing Smith's support for everything from the University of Memphis to the city's zoo. 'FedEx is the engine of our economy, and Fred Smith was its visionary founder. But more than that, he was a dedicated citizen who cared deeply about our city.' Smith rarely publicised the donations he and his family made, but he agreed to speak with AP in 2023 about a gift to the Marine Corps Scholarship Foundation to endow a new scholarship fund for the children of Navy service members pursuing studies in STEM. 'The thing that's interested me are the institutions and the causes not the naming or the recognition,' Smith said at the time. Asked what it means to contribute to the public good, he replied: 'America is the most generous country in the world. It's amazing the charitable contributions that Americans make every year. Everything from the smallest things to these massive health care initiatives and the Gates Foundation and everything in between,' he said. 'I think if you've done well in this country, it's pretty churlish for you not to at least be willing to give a pretty good portion of that back to the public interest. And all this is in the great tradition of American philanthropy.'