FX.co ★ Aussie Stocks Hits Fresh Record Close

The S&P/ASX 200 index rose by 0.7% to reach a new record closing of 8,756 on Wednesday, breaking its four-session losing trend. This improvement was largely attributed to advances in major banking stocks following weaker-than-expected inflation data, which fueled speculation about a potential rate cut by the Reserve Bank of Australia (RBA) in August. In the second quarter, Australia's headline inflation fell to 2.1% from the previous 2.4%, slightly below the anticipated 2.2%. Meanwhile, the RBA's preferred trimmed mean inflation measure decreased to 2.7% from 2.9%, remaining within the target band of 2–3%. The softer inflation figures, coupled with recent labor market softness, led to a full market pricing of a 25 basis points rate cut in August, with expectations for the rate to drop to 3.1% by the end of the year. Despite this, concerns persisted due to U.S. Commerce Secretary Lutnick's confirmation that there would be no postponement of President Trump's Friday tariff deadline, and separate trade discussions with China concluded without any significant progress. On the corporate front, the financial sector saw a 1.4% increase, with the Big Four banks posting gains between 1% and 1.6%, driven by optimism that lower interest rates would enhance credit demand and profitability. The real estate segment also saw a 1.2% rise, led by URW, which increased by 0.7%.