On Thursday, the S&P/ASX 200 index experienced a notable increase of 0.7%, reaching approximately 8,880 and setting a new record high. Investors were closely monitoring the crucial July jobs report for potential indications regarding future policy directions. This follows the Reserve Bank of Australia's recent decision to reduce interest rates by 25 basis points to 3.6%. Economists are projecting an addition of 25,000 jobs for July, a notable increase compared to June's modest gain of 2,000 positions. The unemployment rate is expected to decline slightly to 4.2% from 4.3%, with the participation rate remaining steady at 67.1%. While muted job growth has previously justified rate cuts, a robust jobs report could suggest renewed economic momentum.
Meanwhile, rising expectations for a possible rate cut by the US Federal Reserve in September have bolstered global investor sentiment. In the corporate sphere, Westpac shares surged by 6.5%, reaching an all-time high, following their announcement of a consistent A$1.9 billion profit for the third quarter, marking a 5% increase from the previous year. On the other hand, Commonwealth Bank of Australia (CBA) saw a further decline of 1.2% despite reporting record profits, which did little to allay valuation concerns. The copper mining sector also faced setbacks, led by a 2.4% drop in Rio Tinto shares, after Chile revised its forecast for copper production growth in 2025 downwards.
