Good Morning everyone! It's Wednesday July 9 and We are covering the RBA's shocking announcement that the cash rate will remain at 3.85 per cent, a decision that has sent the Aussie dollar higher. Meanwhile, Charli Grant scored a goal in stoppage time to secure a 3-2 victory for the Matildas over Panama at the Perth Rectangular Stadium on Tuesday night.

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Reserve Bank Holds Cash Rate at 3.85% in Split Decision as Board Awaits Inflation Clarity

The Reserve Bank of Australia has decided to maintain the cash rate target at 3.85 percent following a closely divided board meeting that saw six members supporting the hold while three voted against the decision.

The central bank's Monetary Policy Board cited the need for additional economic data before proceeding with further rate adjustments, despite inflation continuing its downward trajectory from 2022 peaks.

While headline inflation reached the midpoint of the 2-3 percent target range in the March quarter, recent monthly Consumer Price Index data for June showed slightly stronger results than anticipated, prompting the board's cautious approach with the cash rate already 50 basis points lower than five months earlier.

The decision reflects ongoing economic uncertainty both domestically and internationally, with the RBA highlighting concerns about global trade policy developments and their potential impact on economic activity. Labor market conditions remain tight with low unemployment measures and continued constraints on labor availability across various sectors, while wage growth has moderated but unit labor costs remain elevated due to weak productivity growth.

The central bank emphasized its commitment to achieving both price stability and full employment objectives, noting that monetary policy remains well-positioned to respond decisively to international developments that could materially affect Australian economic activity and inflation outcomes.

Treasurer Acknowledges Millions Disappointed by Rate Hold, Welcomes Board Split Transparency

Treasurer Jim Chalmers acknowledged today that millions of Australians would be disappointed by the Reserve Bank's unexpected decision to maintain the cash rate at 3.85 percent, while praising the central bank's unprecedented move to reveal a 6-3 split vote among board members for the first time in its history.

Speaking in Canberra following the RBA's announcement, Chalmers emphasized his respect for the central bank's independence, stating he would not "second-guess decisions taken independently by the Reserve Bank" despite the outcome differing from market expectations and economist predictions.

The Treasurer welcomed the new transparency measures as "quite a substantial change in the way that the Reserve Bank reports its decisions," arguing that the divided vote demonstrates proper deliberation and debate within the monetary policy board.

Despite acknowledging public disappointment, Chalmers highlighted significant economic progress under the current government, including two previous rate cuts over five months and both headline and underlying inflation returning to the RBA's target band for the first time since August 2021.

The Treasurer emphasized Australia's economic resilience, noting low unemployment, continued growth without recession, and real wage growth, stating it "should be a source of considerable pride for Australians that unlike a lot of countries, we've been able to make this progress on inflation without our economy going backwards."

Chalmers also addressed broader policy considerations including global uncertainty from US trade policy under President Trump, upcoming tax reform discussions, and the importance of maintaining stable trading relationships with China, while confirming Australia remains subject to the lowest baseline US tariff rate of 10 percent.

Albanese Heads to China for High-Stakes Diplomatic Talks as Australia-China Trade Relations Stabilize

Prime Minister Anthony Albanese will travel to China this weekend for crucial diplomatic meetings with President Xi Jinping and Premier Li Qiang, marking his second visit as Australia's leader amid ongoing efforts to stabilize bilateral relations.

The July 12-18 visit to Beijing, Shanghai, and Chengdu comes as Australia has successfully removed over $20 billion in Chinese trade impediments, with exports of wine and barley not only recovering but exceeding pre-restriction levels. Albanese emphasized that China remains Australia's largest trading partner, accounting for nearly one-third of total trade, and will discuss trade, tourism, and regional security during the Annual Leaders' Meeting.

Domestically, the Prime Minister used his Hobart visit to promote federal healthcare initiatives, highlighting the success of Urgent Care Clinics that have treated 1.5 million Australians since launching.

Working alongside Tasmanian Labor Leader Dean Winter, Albanese promoted the proposed "TassieDoc" program designed to provide free GP visits across Tasmania. The visit also addressed rising antisemitic incidents, with Albanese defending his government's $60 million security funding response while facing pressure for stronger action against hate crimes following recent Melbourne synagogue attacks.

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BUSINESS & MARKETS

➡️  Trump Tariffs Could Boost Australian Economy, Productivity Commission Analysis Finds. Australia's Productivity Commission analysis reveals Trump's global tariff regime could deliver a small economic boost to the nation through trade diversion and investment flows, as economists declare Australia is in the "best position" globally to withstand US protectionism while the American president extends tariff negotiation deadlines to August 1.

➡️  BHP Ordered to Pay $66M After Losing Fair Work Commission Same Pay Challenge. BHP will pay $66 million to 2,200 mining workers after losing a Fair Work Commission challenge against Australia's "same job, same pay" laws, with affected contractors at three Queensland mines set to receive $30,000 annual pay increases under the Albanese government's labor hire legislation.

➡️  Amazon Prime Day 2025: Extended 4-Day Event Expected to Drive $23.8B in Spending. Amazon launches its longest-ever Prime Day sales event on July 8, 2025, extending to four days through July 11 with analysts projecting Americans will spend $23.8 billion across the extended shopping period, representing a 24% increase from last year's two-day event.

POLITICS & WORLD AFFAIRS

➡️ Trump Announces New Tariffs Up to 40% on 14 Countries: August Deadline Extended. President Trump announced new tariffs ranging from 25% to 40% on 14 countries including Japan, South Korea, Malaysia, and South Africa, extending the implementation deadline to August 1, 2025, while encouraging affected nations to manufacture goods in the United States to avoid the trade penalties that caused stock markets to fall sharply.

➡️  5 Israeli Soldiers Killed in Gaza as Netanyahu Meets Trump on Ceasefire Deal. Five Israeli soldiers were killed by explosive devices in northern Gaza while 18 Palestinians died in Israeli strikes, as Prime Minister Netanyahu met with President Trump at the White House to discuss a 60-day ceasefire agreement that officials say is 80-90% complete and could end the 21-month conflict.

➡️ 3 Children Killed as Train Crashes Into School Bus in Tamil Nadu, India. Three children aged 12, 15, and 16 were killed when a passenger train collided with their school bus at a railway level crossing in Tamil Nadu, India, with authorities arresting the gatekeeper for negligence amid conflicting reports about whether safety protocols were followed.

ENTERTAINMENT,SPORTS & TRAVEL

➡️ Crown Perth Keeps Casino License After WA Government Approves Major Reforms. Crown Perth will retain its casino license without penalties after Western Australia's Gaming Minister declared the casino's $200 million reform program successful, three years after a royal commission found serious failings including money laundering and criminal activity at the venue.

➡️ Matildas Beat Panama 3-2 as Charlie Grant Scores Stoppage Time Winner in Perth. Charlie Grant scored a dramatic 91st-minute winner as the Matildas defeated Panama 3-2 at Perth's HBF Park, with Michelle Heyman's double helping Australia level their international series after Panama had stunned the hosts 1-0 in the opening match.

➡️ Emirates Expands Premium Economy to 50+ Routes as Airlines Battle for Mid-Tier Market. Emirates is rapidly expanding its Premium Economy service to over 50 global destinations throughout 2025, including a new Kolkata route launching July 18th, as major airlines including Qatar Airways, Singapore Airlines, Lufthansa and ANA compete to capture the growing mid-tier travel market between economy and business class.

FROM THE TEAM

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