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Reserve Bank of Australia Maintains Cash Rate at 4.35%

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The Reserve Bank of Australia decided to leave the cash rate target unchanged at 4.35%, saying that while the economy appears to be slowing as expected after three rate lifts since the beginning of 2026, inflation remains too high and is not expected to return to around the midpoint of the target range until late 2027, according to a Tuesday statement by the central bank.

The central bank said the board decided to leave the cash rate unchanged while it assesses how the economy is evolving, but will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate further if upside risks materialize.

The RBA said disruption to global oil supply is adding directly to inflation, with higher fuel prices being passed through to the prices of other goods and services. This means inflation is likely to remain high for some time, in addition to the effect of capacity pressures in the economy.

The RBA said resolution of the Middle East conflict remains uncertain, and global oil supply is expected to take time to recover, maintaining upward pressure on energy prices and inflation, while a period of prolonged uncertainty may also weigh on growth overseas and in Australia.

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International

BRC: UK Retail Sales Gain 1% in July

Retail sales in the UK rose 1% year over year on a like-for-like basis in July, following a 1.7% increase in June, according to data from the British Retail Consortium published Tuesday.The reading, which missed the expected 1.6% gain for the month, corresponds to the slowest retail sales growth since February.BRC said consumers spent on summer clothes, home entertainment, and garden-related items during the warm weather, while keeping budgeting in mind. The FIFA World Cup also drove sales during the month.

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International

Singapore Raises 2026 GDP Growth Forecast to 4.5%-5.5%

Singapore's Ministry of Trade and Industry (MTI) upgraded the region's full-year 2026 GDP growth forecast to a range of 4.5% to 5.5%, significantly higher than the previous projection of 2% to 4%.The higher forecast reflects expectations that strong global AI-related demand will help cushion the economic impact of the US-Israel-Iran conflict, the MTI said Tuesday.Singapore's economy grew 5.9% year over year in the second quarter, slowing from the 6.3% growth in the first quarter. On a seasonally adjusted quarter-over-quarter basis, the economy expanded 1.4% in Q2, accelerating from the 1.2% growth in Q1, according to preliminary data.The second-quarter expansion was driven by strong performances in the manufacturing, wholesale trade, and finance and insurance sectors.For the first half of the year, Singapore's GDP grew 6.1% from a year earlier.

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International

Australian Consumer Confidence Rises, Reaches 'Relatively Steady' State, ANZ Says

Australian consumer confidence rose 0.3 points in the week of Aug. 3 to 9 to 75 points, reaching a relatively steady state, according to a Tuesday note from ANZ.The four-week moving average eased 0.1 points to 74.1 points.Weekly inflation expectations fell 0.2 percentage points to 5.7%, while the four-week moving average was unchanged at 5.7%.Current financial conditions over the last year increased 0.2 points to 65.4, while financial conditions over the next 12 months declined 1.5 points to 82.4.The decline in households' confidence in the 12-month outlook for their finances and the rise in inflation expectations may have been due to a pick-up in petrol prices, ANZ economist Madeline Dunk said.Short-term economic confidence over the next 12 months was up 2.7 points to 69.5, while medium-term economic confidence over the next five years rose 2.1 points to 82.3.The "time to buy a major household item" sub-index fell 1.9 points to 75.7, per the report.

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