While market commentators are expecting the Reserve Bank of Australia to deliver its first rate cut in five years, investors remain cautious.
According to the RBA Rate Indicator, the likelihood of the RBA announcing a rate cut to 4.1%, from 4.35% currently, sits at 90%.
The S&P/ASX 200 edged down 19.7 points, or 0.23%, 8,517.4 points by 10.30am AEDT. Over the last five days, the index has gained 0.39% and is currently 1.14% off its 52-week high.
“We expect the RBA to cut the cash rate 25 basis points today,” ANZ Economist Madeline Dunk says.
“Given the activity backdrop, we do not expect the tone of the post-meeting statement will be particularly dovish. It is likely that the rate cut will be described as an easing in the degree of restriction.”
The ANZ is also expecting lower unemployment rate forecasts and a downgrade to near-term trimmed mean inflation forecasts.
“GDP is likely to be weaker over the near term but marginally stronger further out,” Dunk says.
Eight of the 11 sectors climbed higher after the opening bell. Materials is the best performing sector, gaining 0.33% in early trade and 1.38% over the past five days. Industrials inched up 0.06% and energy was up a slight 0.04%.
Gold recovered from its previous sell-off, however gains were tempered as traders wait for more information on US President Donald Trump’s tariffs. The safehaven metal was fetching around US$2,899 ($4,563) an ounce this morning (18 February).
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
