2h agoTue 16 Dec 2025 at 8:36pmMarket snapshotASX futures: -0.1% to 8,576 pointsASX 200 (Tuesday close): -0.4% to 8,599 pointsAustralian dollar: -0.1% to 66.35 US centsWall Street: Dow Jones (-0.4%), S&P 500 (flat), Nasdaq (+0.4%) Europe: DAX (-0.6%), FTSE (-0.7%), Stoxx 600 (-0.5%)Spot gold: +0.3% $US4,312/ounceOil (Brent crude): -0.6% to $US 58.99/barrelIron ore: +1.5% to $US103.10/tonneBitcoin: +1.6% at $US87,612

Prices current around 7:35am AEDT 

14m agoTue 16 Dec 2025 at 10:32pmRevised interest rate predictions from CBA, Westpac, NAB and ANZ

Westpac is the last of the ‘big four’ banks to change its predictions on where interest rates are headed next year.

Here’s what economists from the major banks now think the Reserve Bank will do next with the cash rate:

Commonwealth Bank: potential hike in FebruaryWestpac: ‘extended hold’ in 2026NAB: two hikes (February and May)ANZ: ‘extended hold’ in 2026

The banks, meanwhile, have been hiking their fixed-rate home loans as they anticipate higher borrowing costs from the RBA.

33m agoTue 16 Dec 2025 at 10:14pmInflation is still heading down: Westpac

Here’s a little more detail from the note issued by Westpac chief economist Luci Ellis, changing the bank’s RBA rates call.

Westpac had previously forecast two interest rate cuts in May and August ofnext year but now sees the central bank on an “extended hold” through 2026.

Dr Ellis says the Australian economy has played out largely as Westpac had expected and its forecasts for 2026 see a further recovery.

“Inflation saw a bump in September quarter and October month,” she wrote.

“The main sources of the surprise had little to do with domestic demand or labour market pressures.

“Rather, a sizeable part of that bump looks to have been administered prices and noise.

“The RBA recognised this at the time but has since communicated that it is more worried about upside risks to inflation.

“And since what matters for monetary policy is how the RBA sees things, this means that rate cuts are off the table for the time being.”

Dr Ellis noted that after inflation surprised to the upside, “markets immediately rushed to the other side of the boat to price in rate hikes”.

“The probability of a hike is not zero, and the RBA was right to warn the community of the possibility.

“In our view, however, a near-term hike is far from the base case.

“Labour market data has been less bullish than the inflation data, and the Monetary Policy Board will need to balance this with its fears about inflation.”

39m agoTue 16 Dec 2025 at 10:07pmTreasurer says spending ‘as a share of the economy’ is lower compared to previous government

Treasurer Jim Chalmers was on ABC radio this morning and gave a preview of what to expect in today’s mid-year budget update.

“We’ve got spending as a proportion of the economy down from almost a third under our predecessors, we’ve got it down to about a quarter,” he told AM host Sabra Lane.

“Now it’s in the high 26 per cents, and it will go down over the course of the forward estimates.

“So that’s a number which is a consistent feature of budgets and budget updates, and what it will show is that spending as a share of the economy is lower than the peak that we saw under our predecessors and will get lower still.”

Debts for the younger generation and unaffordable house prices

Sabra followed up by asking what the government will do to fix “structural imbalances” which make home ownership unaffordable for many and the debts being left behind for younger Australians to pay off in the future.

Mr Chalmers said ” debt will be down compared to the trajectory that we inherited” because of his government’s “responsible economic management”.

The Treasurer also said: “What people will also see is the bottom line is better in every year over the forward estimates”.

In relation to housing, he said “there aren’t lots and lots of new initiatives”.

“We are delivering on our commitment in this mid‑year update to build an extra 100,000 homes for first home buyers.

“We are delivering our commitments here on mental health, $1.1 billion, and fast-tracking tradies, another $100 million.

“But there are a couple of new elements too. There will be an extra $233 million for the CSIRO, the science organisation. That has been something that we’ve committed to for some time, an extra $45 million in the last budget, an extra $233 million in this budget.

“And also, our boost to low-income super contributions, which will overwhelmingly benefit the young and people on lower incomes, so that they get a better balance when they retire.”

46m agoTue 16 Dec 2025 at 10:00pmRBA on ‘extended hold’ through 2026: Westpac

The economics team at Westpac has revised its interest rates outlook for 2026.

It had been one of the last major banks forecasting cuts next year, but now it sees the Reserve Bank on “an extended hold”.

However, Westpac continues to see risks on both sides, so it isn’t completely writing off the prospect of further easing.

“We reserve the option to put rate cuts in 2026 back on the table if the labour market starts to unravel,” Westpac chief economist Luci Ellis wrote in a note.

“We think that rate hike talk is premature.

“We cannot rule out that more near-term bad news on inflation spooks the RBA and induces a near-term hike, but in our view, it is not the most likely outcome.”

56m agoTue 16 Dec 2025 at 9:51pmOil settles near five-year low amid oversupply concerns, Russia-Ukraine progress

Oil prices have fallen to their lowest level since February 2021 amid ongoing jitters about oversupply and a potential Russia-Ukraine peace deal.

If both countries decide to end their four-year war, it could result in sanctions against oil producer Russia being lifted.

The price of Brent crude futures fell 2.7% to $US58.92 a barrel, while US West Texas Intermediate crude dropped 2.7% to $US55.27.

“Brent has dropped this morning to below $US60 per barrel for the first time in months, as the market assesses a potential peace deal resulting in additional Russian volumes becoming available and oversupplying the market further,” Rystad analyst Janiv Shah told Reuters.

According to Reuters:

The US offered to provide NATO-style security guarantees for Kyiv, and European negotiators reported progress in talks on Monday, sparking optimism that an end to the war was closer.

Russia, meanwhile, said it was not willing to make any territorial concessions, state news agency TASS quoted Deputy Foreign Minister Sergei Ryabkov as saying.

Adding to the pressure, soft Chinese economic data on Monday further fuelled concerns that global demand may not be strong enough to absorb recent supply growth, said IG market analyst Tony Sycamore.

China’s factory output growth slowed to a 15-month low, official data showed. Retail sales also grew at their slowest pace since December 2022, during the COVID-19 pandemic.

Fears of an oversupply were marginally offset by the US seizing an oil tanker off Venezuela last week, but traders and analysts said a glut of floating storage and a surge in Chinese buying from Venezuela in anticipation of sanctions were also limiting the market impact.

1h agoTue 16 Dec 2025 at 9:20pmFederal treasurer to deliver mid-year budget update

Treasurer Jim Chalmers will today hand down a Mid-Year Economic and Fiscal Outlook (MYEFO) showing an $8.4 billion improvement to the budget bottom line.

For the latest updates on this story, you can check out the ABC’s Politics live blog here:

1h agoTue 16 Dec 2025 at 9:17pmS&P 500’s record three-day losing streak, ASX futures trading flat

Wall Street has finished trading, and it was a mostly negative day for US stocks. Here are the closing figures:

Dow Jones: -0.6% to 48,114 pointsS&P 500: -0.2% to 6,800 pointsNasdaq Composite: +0.2% to 23,111 points

The benchmark S&P index fell for its third day in a row.

Meanwhile, ASX futures are down 2 points (practically flat).

So it appears unlikely the Australian share market will move very much when the local trading day begins in just under two hours.

1h agoTue 16 Dec 2025 at 8:48pm

Market recap: Alan Kohler’s finance report

In case you need a refresher before the trading day begins, I can certainly recommend watching Alan Kohler’s finance report from last night’s 7pm news.

Alan talked about the Australian share market falling for its second straight day, surging defence stocks, and consumer pessimism (in response to forecasts the Reserve Bank is likely to lift interest rates next year), among other things.

You can watch his report here:

Loading…2h agoTue 16 Dec 2025 at 8:36pmMid-year budget update to show $8.4b improvement to bottom line

The federal budget’s bottom line is expected to improve by more than $8 billion over the next four years compared to earlier forecasts, as Labor vows to make “every dollar count” amid economists’ calls for more spending restraint.

Treasurer Jim Chalmers will declare the federal government has made a “lot of progress” repairing the budget when he hands down the Mid-Year Economic and Fiscal Outlook (MYEFO) in Canberra on Wednesday.

The new figures will show the 2025-26 budget deficit is now due to reach $36.8 billion, which is $5.3 billion lower than was forecast at the election.

With inflation rising in recent months, economists are calling on Labor to rein in spending or find more sources of revenue to cover unavoidable costs such as veteran and pension payments.

For more, here’s the story by Clare Armstrong:

2h agoTue 16 Dec 2025 at 8:36pmASX likely to open flat, oil prices sink to four-year low

Good morning, and welcome to the ABC’s finance blog! I’ll be your guide for the next few hours.

The Australian share market is likely to start its day relatively quietly, with ASX futures down 0.1%.

It follows a mostly negative session on Wall Street as investors digested the latest US job figures, which showed unemployment rising to a four-year high of 4.6% as cracks emerge in America’s labour market.

In the final half-hour of trade, the Dow Jones was down 0.4%, the S&P 500 was flat, while the Nasdaq Composite gained 0.4%.

The Australian dollar was relatively steady at 66.35 US cents.

Meanwhile, oil prices fell to their lowest level in four years.

It comes as Ukrainian President Volodymyr Zelenskyy says a deal aimed at ending Russia’s nearly four-year-old invasion could be finalised with the US and then presented to Moscow within days.

Brent crude futures dropped 2.8% to $US58.88 per barrel.

In the meantime, go grab a coffee, tea, or whatever you fancy in the morning! I’ll have more updates for you shortly.