Australian employment rose only marginally in June as the jobless rate jumped to the highest since late 2021, showing perhaps the first crack in what had been an unusually resilient labour market and adding to the case for a rate cut next month.
Investors sent the Australian dollar down 0.7% to $0.6480, the lowest in over three weeks. Three-year government bond yields slid 10 basis points to 3.386% as markets ramped up bets for an August rate cut to 85% from 76% previously.
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Liquidators are probing how money for a $15 million Queensland government project was transferred from the contract-winning cybersecurity company to its founder's bank account within 24 hours of the funds arriving, ABC.net.au reported. The funds transfer to Cryptoloc Holdings founder Jamie Wilson, who once wooed the state's top politicians and pop stars, is under investigation as a potential "fraudulent" transaction, according to a liquidator's report. The move is the latest shock from a disastrous cybersecurity tender won just before last year's state election by Cryptoloc Holdings.
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Australia's central bank said on Thursday it was taking another major step toward a wholesale central bank digital currency (CBDC) with a range of industry partners pursuing projects using real money and assets for the first time, Reuters reported. The Reserve Bank of Australia said its "Project Acacia" initiative would test 19 pilot cases involving money and assets, along with five proof-of-concept use cases involving simulated transactions. The trials involve a range of asset classes, including fixed income, private markets, trade receivables and carbon credits.
Australia is “urgently seeking” more detail on President Donald Trump’s threat to impose 200% tariffs on pharmaceutical imports to the U.S., Treasurer Jim Chalmers said, Bloomberg reported. “These are obviously very concerning developments,” Chalmers told Australian Broadcasting Corp. radio in an interview on Wednesday. “Our pharmaceutical industry is much more exposed to the US market. And that’s why we’re seeking – urgently seeking – some more detail on what’s been announced.” The U.S.
Australia's central bank on Tuesday left its cash rate steady at 3.85%, a shock for markets that had confidently wagered on a cut, saying the majority of the board wanted to wait for more information to confirm inflation was slowing, Reuters reported. Traders were quick to send the Australian dollar racing up 0.8% to $0.6543, while three-year bond futures extended earlier losses and fell 10 ticks to 96.60. The swift moves in markets imply around an 88% chance the cash rate would be cut to 3.60% at its Aug. 12 meeting, and now favours rates bottoming at 3.10% rather than 2.85%.
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Australian retail sales barely grew for a fourth straight month in May as gains in clothing purchases were offset by a rare drop in food sales, bolstering the case for another cut in interest rates next week, Reuters reported. The result dashed hopes that lower borrowing costs and rising real incomes would revive household demand, suggesting the Reserve Bank of Australia will have to again downgrade consumption forecasts, in a blow to the economic outlook.
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Job vacancies in Australia rebounded in the May quarter, led by openings in the construction and professional sectors, data showed on Thursday, in a sign demand for labour remained resilient despite a soft economy, Reuters reported. Figures from the Australian Bureau of Statistics (ABS) showed vacancies bounced 2.9% in the three months to May, partly reversing a 4.3% drop in the previous quarter ended February. Job openings were still down 2.8% from May last year at 339,400, but that was the smallest annual decline in the past two years.
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Inflation pressures across the Australian economy continued to abate in May, setting the stage for a third cut in interest rates by the Reserve Bank of Australia next month, the Wall Street Journal reported. The monthly CPI indicator rose by just 2.1% in the 12 months to May, following a 2.4% rise in the 12 months to April. Annual trimmed mean inflation was 2.4% in May, down from 2.8% in April. The RBA cut interest rates by 25 basis points in May, highlighting the growing risks to world growth from the U.S. policy on tariffs and rising geopolitical risks.
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