Peter Overton, Nine News Sydney: Interest rates were kept on hold by the Reserve Bank today, however markets were anything but steady…
Shares falling heavily as Donald Trump re-kindled his global trade war
Ross Greenwood: Close to record highs and insight of the best performance in 10 years, our sharemarket stumbled today over the hurdled of Donald Trump and tariffs.
US President Donald Trump: I gave them a big break on tariffs, but now Im taking that break off.
Greenwood: For once Trump didn’t aim his tariffs on China, instead at Argentina, Brazil and France.
But that was enough to spook markets, worried a trade War will re-ignite.
Here, interest rates were on hold, with the worry now the Reserve Bank rate cuts are pushing property prices up too quickly.
Chris Richardson, Deloitte Access Economics: Crazy house prices and the leap they are seeing at the moment, is a bad thing for the economy long-term.
Greenwood: The economic puzzle is house prices are again rising fast, the stock-market close to record highs, and today the first consecutive current account surplus since 1973 – in other words, more money is coming into the country, than going out.
But the Reserve Banks tipped to cut interest rats again next year because things are apparently so crook.
Richardson: Lower interest rates are powering up housing, but not necessarily much else.
Greenwood: The trick is to get people spending, to get retail going – that’s the tough part
Ian Purchas, SV Partners: There’s not a lot of confidence with consumers to go out and spend money, and the RBA with its interest rates drops doesn’t really seem to have helped that much.
Greenwood: The Reserve Bank today gave a hint, saying lower interest rates have boosted house prices which in time should lead to increased spending.
But maybe, not in time for some.
Purchas: My greatest fear Ross, is we are going to have a lot more financial failures of those bigger retailer businesses that we’ve seen happening over the last six months.
Greenwood: the Reserve Bank today said the economy should pick up again in 2021 – more than a year away.
Ross Greenwood, Nine News