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This week’s biggest story (in my view) for the Australian economy actually started late last week. Quietly, CBA cut its term deposit interest rates, prompting ANZ and NAB to do the same on Monday of this week.

The moves are seen as pre-empting RBA rate cuts. In between the lines, it appears banks are dropping hyper-competitive interest rates to attract customers, anticipating an Australia where money is slightly cheaper – and to protect their own margins.

Of course, the RBA has indicated its inflation target won’t be hit until 2026 (helpfully, they didn’t address the fact rental inflation is becoming the major core driver outside of fuel and electricity,) so it’s still a guessing game we’re all too familiar with. It’s not reassuring Reece Ltd, in its earning report this week, mused we might be facing another year of housing weakness.

In the US, we’ve had Kamala Harris’s first real landmark economic policy statement – the new Democrat candidate has suggested raising the US corporate tax rate to 28%.

This feels, to me, like an obvious crowd pleaser, and because of that, unambitious: it’s not like the American tax system has a shortage of ways corporations can minimise tax burdens. It’s not like the Democrats haven’t always offered corporations loopholes, either.

Looking at US markets as opposed to politics, this week’s Monday session confirmed the AI thematic still has steam – not long after I questioned whether we’d seen momentum stall.

NVIDIA was a winner on Monday night US time for the week as the company officially shrugged off all of its recent losses incurred during the recession panic sell-off – once again, we’ve seen that markets are fickle.

The weekend prior (so, Saturday and Sunday of Week 33,) we also saw gold hit over USD$2,500/oz – a fresh all-time-high for the safe haven asset.

Not surprising given the world was watching Ukraine’s counter-invasion of Russia roll on, and the looming potential of an Iranian-Israeli war.

Elsewhere, in the US-centric world of finance, the world has been closely watching Jackson Hole. I’m not too sure why: Powell will say something markets want to hear, or he won’t.

At any rate, we’ll all go back to talking about interest rate cuts. Who cares? It’s looking like September either way. 

HotCopper’s favourite this week

Australian Economy 

Australian Equities

International Economies

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