The ASX is set close slightly lower today after US markets were down on concern around hurricanes along with weak US economic and jobs data and ongoing Middle East concerns.
Local markets faced uncertainty ahead of some key weekend events, including the release of US PPI data and bank earnings reports, China’s Foreign Ministry briefing on fiscal policy, and a possible military strike on Iran by Israel.
The Energy sector was the strongest performer today, while Real Estate, Financials and Telcos were in the red.
RBNZ slashes interest rates
The Reserve Bank of New Zealand (RBNZ) decided to slash the official cash rate by 50 basis points to 4.75% as it continues to grapple with sluggish economic activity, weak business investment and soft consumer spending.
This marks the second consecutive rate cut by the central bank, following a 25-basis-point reduction in August in an attempt to reverse the trend of weakening economic conditions.
The call represents a sharp shift in policy from earlier in the year when the RBNZ had flagged potential hikes.
But its restrictive monetary policy contributed to an economic slowdown, with employment conditions deteriorating and low productivity growth further constraining activity.
The country has recently moved in and out of technical recession, with some economists predicting a further economic contraction in the coming quarters.
The economy faces increasing challenges, including a softening labour market affected by both domestic economic conditions and external factors.
RBNZ will be closely watching inflation figures, due out in late October, and employment data, expected in early November, to guide its policy decisions.
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