Australia 200 afternoon report: 8 July 2025

The Australia 200 trades 24 points (-0.27%) lower at 8564 as of 3.10pm AEST.

The Australia 200 (ASX 200) has slipped away from the 8600 level it has battled with in recent days, after the RBA disappointed the market by keeping its cash rate on hold at 3.85%.

RBA Board splits on rate decision

The Reserve Bank of Australia (RBA) has kept its cash rate on hold today at 3.85%, surprising the market which was almost fully priced for a 25 basis point (bp) rate cut.

While the case for further monetary easing appeared to have increased since the May meeting—following a soft May Consumer Price Index (CPI) report and tepid first quarter 2025 growth data—the RBA opted to keep rates on hold, using the easing in trade and tariff concerns since Liberation Day to wait for "a little more information to confirm that inflation remains on track to reach 2.5% on a sustainable basis."

This most likely refers to the second quarter inflation report, which is due in three weeks' time on 30 July.

The decision to hold rates was made on a vote of 6-3, with six in favour and three against, raising questions about the presence of a dovish consensus among the Board. The Board's vote was published today for the first time following the formal review of the RBA at the end of 2023, to ensure transparency and accountability in its decision-making.

Forward guidance and data dependency

The sentence in the May statement that referenced the Board considering a "severe downside scenario" in relation to the Liberation Day tariffs and the risk of a trade war was notably absent from today's statement. In terms of forward guidance, the RBA said it is data dependent, noting "it will be attentive to the data and the evolving assessment of risks" to guide its decisions.

Ahead of the next RBA board meeting in five weeks (12 August), and aside from the second quarter inflation report mentioned above, the following data releases will help determine whether the RBA cuts by another 25bp to 3.60% in August or waits until September:

• Westpac Consumer Confidence (Tuesday, 15 July)
• Labour Force report for June (Thursday, 17 July)
• Retail Sales for June (Thursday, 31 July)

The RBA will also no doubt pay close attention as to where tariff rates settle both here and abroad after the latest round of US tariff headlines this week and the new 1 August deadline.

Market reaction and rate expectations

Post the RBA's decision, the Australian interest rate market which was pricing in 75bp of RBA rate cuts between now and year end is now pricing in 61bp of RBA cuts between now and year end, with 21bp (85%) of rate cuts priced for the August meeting.

Attention now turns to the RBA's press conference at 3.30pm AEDT for more insights behind today's "on hold" decision, which will shape expectations towards the next RBA rate cut coming in just five weeks' time.

Australia 200 stocks

Cosumer discretionary sector

• A2 Milk fell 3.8% to $7.61
• Harvey Norman declined 2.22% to $5.29
• Premier Investments dropped 2.09% to $20.13
• Bega Cheese lost 1.94% to $5.29

Real estate sector

• Mirvac fell 2.01% to $2.19
• Scentre Group declined 2% to $3.71
• Dexus dropped 1.87% to $6.83
• GPT Group decreased 1.76% to $5.03

Australia 200 technical analysis

Providing the Australia 200 holds above support at 8420/8400 on a sustained basis, the view is the correction from the 8639 high is complete at the 8421.1 low and that a retest and break of the 8639 high will likely be forthcoming, before a push to 8800.

Aware that a sustained break of support at 8420/00 would indicate a pullback towards the 200-day moving average at 8250 is underway.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 8 July 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}