The Reserve Bank of Australia (RBA) has held rates steady at 4.10% as was widely expected and the ASX kept a tight grip on its gains by the closing bell on Tuesday (1 April).
The RBA says in its statement recent information suggests that underlying inflation continues to ease in line with the most recent forecasts published in the February Statement on Monetary Policy.
However, the board says it needs to be confident that this progress will continue so that inflation returns to the midpoint of the target band on a sustainable basis and is therefore cautious about the outlook.
“Sustainably returning inflation to target within a reasonable timeframe is the board’s highest priority,” the RBA says.
“This is consistent with the RBA’s mandate for price stability and full employment. To date, longer term inflation expectations have been consistent with the inflation target and it is important that this remain the case.”
Saxo Asia Pacific Senior Sales Trader Junvum Kim says the RBA seems to be focusing on returning inflation to target levels, as it added the word ‘sustainably’ in the statement while cautiously navigating global uncertainties, including US President Donald Trump’s impending tariffs.
“Despite a tight labour market, the RBA is seeking more evidence on inflation trends before easing rates further,” he says.
ANZ continues to expect a shallow easing cycle, with just one more cut, most likely in August.
The bank’s expectation that the Q1 trimmed mean will print at 0.7% quarter-over-quarter suggests that the RBA may wait to ease, particularly if it views the labour market as remaining resilient, according to Head of Australian Economics Adam Boyton.
“However, greater market instability and global policy uncertainty could see additional (and earlier) RBA easing,” he notes.
The S&P/ASX 200 advanced 81.8 points, or 1.04%, to 7,925.2 points but is still down 2.87% since the start of 2025.
All 11 sectors ended the session in the green. Utilities jumped 1.8%, materials rose 1.04% and energy climbed 0.93%.
Despite materials making decent gains on Tuesday, the uranium and lithium miners found themselves heading down.
Deep Yellow (ASX:DYL) slid 7.55% to $0.98, Liontown Resources (ASX:LTR) tumbled 6.4% to $0.59, Paladin Energy (ASX:PDN) reversed its early gains to close down 5.68% and Pilbara Minerals (ASX:PLS) continued its retreat by a further 5.64% to $1.59.
Deterra Royalties (ASX:DRR), meanwhile, rallied 3.06% to $3.71.
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
