04/08/2025
Upcoming Economic Releases (AEDT Time)
• AU RBA Cash Rate decision – 12 August 14:30
• AU Employment data – 14 August 11:30
• US Employment data – 7 August 22:30
• US July CPI data – 12 August 22:30
• US July Retail Sales data – 15 August 22:30
Market Update
Australian Markets
• The S&P/ASX 200 dropped 0.07% over the fortnight, to close at 8,662.05 points. Sector performance was generally slightly negative, although Healthcare gained 2.14% and Energy rose 1.01%. Materials lost 2.27%, Financials dropped 0.21%, and Utilities fell 0.38%.
• June quarter CPI data released by the ABS on 30 July showed Australia’s inflation slowed to 2.10% in the year to June, down from 2.40% in March, showing that price pressures are continuing to ease. With underlying inflation also falling, the Reserve Bank may be in a position to cut interest rates as early as it’s August 12 meeting.
• Australian Retail Sales Data released 31 July showed a rise of 1.20% in June, driven by discounts linked to sales and new product releases. Non-food related spending drove most of the increase. There were increases across most industries, led by household goods retailing. Cafes, restaurants, and takeaway food dropped -0.40%.
International Markets
• The S&P 500 dropped 0.32% over the fortnight, closing at 6,238.01 (USD), reaching a high of 6,389.77 on 28 July before dropping 1.60% on 1 August following the release of July’s employment data and revisions to May & June data, dramatically reducing the previously supplied figures as described below.
• Tariff rates were announced by President Trump ahead of the 1 August deadline, with different rates depending on each country's trade relationship with the US. The current tariff truce with China was extended. Australia's 10% tariff remains unchanged. Countries were broadly grouped into three categories: 10% for those countries with whom the US has a trade surplus, around 15% for those with a trade deal agreed or with a small deficit, and higher rates for countries without a deal, or with larger trade deficits with the US.
• The U.S. June JOLTS numbers released 29 July showed job openings fell to 7.4 million in June, below expectations, while hires and quits also declined, signalling a cooling but still stable labour market. The drop in quits suggests workers are less confident about finding new jobs, while low layoff rates indicate employers remain cautious about shedding staff.
• U.S. July Conference Board Consumer Confidence Survey also released 29 July showed U.S. consumer confidence rose slightly in July to 97.20, up from 95.20 in June, as concerns about inflation eased somewhat. However, sentiment around job availability and the economic outlook remains cautious, with the expectations index still below recession-warning levels.
• The July Employment Situation Summary from the U.S. Bureau of Labour Statistics, released on 1 August, showed a smaller-than-expected 73,000 jobs added, while the unemployment rate ticked up from 4.10% to 4.20%. Markets were more concerned by significant downward revisions to previous estimates, with May jobs reduced from 144,000 to 19,000 and June from 147,000 to 14,000, adjustments that, although part of the routine data collection process, were unusually large, prompting President Trump to condemn the figures as “rigged” before firing BLS Commissioner Erika McEntarfer, and increasing expectations that the Federal Reserve may cut interest rates at its September meeting.
Commodities
• Over the past two weeks, gold fell from approximately USD $3,432 per ounce to USD $3,387.14 per ounce, reflecting a modest drop amid fluctuating trade tensions and economic uncertainty.
• Oil prices dropped slightly to end the fortnight from about $67.20 to $66.91 per barrel, after rising to approximately $70.00 on 30 July. The uncertainty with tariffs and broader market uncertainty created by the release of the jobs data on Friday 1 August drove a correction to end the fortnight.
