Image source: eyeofpaul © 123RF.com
Early on Tuesday morning, the Monetary Policy Committee (MPC) of the Reserve Bank of Australia released a detailed report outlying the proceedings from its last monetary policy meeting, on the 6th of August. The findings of the report and the expressed opinions within it reveal a great deal about the state of the Australian economy in addition to the MPC's stated views regarding the actual performance of the economy and where exactly set performance diverges from the initial projections of the RBA.
The MPC began by evaluating on the impact that the rising trade tensions between the US and China have been exerting on big economies within the East Asia region and then proceeded on to state their opinions regarding the overall impact of this global uncertainty on the most robust economies in the world. The Committee observed the subdued global growth rate owing to waning export levels as being a direct consequence of international protectionism. They have also cautioned against the rising threat from the steadily accumulating downside risk to global growth.
“In the major advanced economies, risks to the outlook remained tilted to the downside, reflecting the trade disputes. The US economy had continued to grow relatively strongly into the June quarter. […] Weaker global trade and greater uncertainty had also affected growth in output in the euro area.” [source]
As regards the Australian economy, the MPC remarked on the weaker GDP growth in the June quarter and attributed it to dwindling investment rates, particularly in mining. In turn, weaker investment is seen as the prime cause for the diminished sales, especially in retail, and also the sales of new cars. Overall, the Monetary Committee reviewed its earlier gross domestic product forecasts, and it has decided to lower its expectations for the rest of the year.
“The forecast for GDP growth over 2019 had been lowered to 2½ per cent. […] Members noted that although the outlook for consumption remained uncertain, the risks around the outlook were more balanced than they had been for some time. […] Forward-looking indicators for business investment had been mixed. Survey measures of business conditions had been less positive than a year earlier, especially in the retail and transport sectors, but generally had remained around average.”
The Monetary Policy Committee also commented on the observed inflationary pressures and the current labour market conditions, by arguing that even though employment conditions demonstrate signs of strength and wage growth has increased nominally, inflation remains subdued, and consumer spending pressures seem underperforming. Thus, the MPC concluded by substantiating that:
“Based on the information available and the central scenario that was presented, members judged it reasonable to expect that an extended period of low-interest rates would be required in Australia to make sustained progress towards full employment and achieve more assured progress towards the inflation target. […] Members would consider a further easing of monetary policy if the accumulation of additional evidence suggested this was needed to support sustainable growth in the economy and the achievement of the inflation target over time.”
The AUDUSD remains to trade in a narrow-consolidation range close to the historically significant low price level of 0.67410. For the time being the pair is exhibiting early signs of recovery from the previous bearish trend, and arguably is in the process of forming a clearly visible Accumulation stage of the Wyckoff cycle (if you would like to learn more about the functioning of the cycle and how you can use it to your advantage for trading, you can find all of the necessary information in our trading course).
Image source: Trendsharks ©, created with TradingView.com
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
