That's it from us today. Thanks for joining us.
We'll be back tomorrow with more markets and economics news. The ABS will be releasing its latest data on the number of industrial disputes, and overseas arrivals and departures.
That will be ahead of its new labour force figures on Thursday, which will show what happened to the unemployment rate in November.
Until then, take care of yourselves.
Prices current around 5:44pm AEDT.
Live updates on the major ASX indices:
Mineral Resources was the best performing stock on the ASX200 today, gaining 8.69% to close on $37.16 a share. It was followed by Pilbara Minerals (+6.51% to $2.29), Fortescue (+6.23% to $20.45) and Iluka Resources (+5.99% to $513).
The worst performing stock was Pro Medicus, which lost 8.96% in value to close on $244.33. It was followed by Perpetual Ltd (-8.4% to $20.07), Hub25 (-6.06% to $71.1) and Pinnacle Investment Management (-5.88% to $22.74).
Westpac Group chief economist Luci Ellis has circulated a note on today's RBA Board meeting, minutes, and post-meeting press conference.
In her note, she reminds us that her team recently revised their view of the likely path of the cash rate to a base case of a first cut in May.
But she says that comes with important caveats after today:
"As we said at the time, though, we cannot entirely rule out an earlier start date of 18 February or 1 April should outcomes continue to undershoot the RBA’s expectations, especially for trimmed mean inflation.
"Today’s change of language represents a welcome acknowledgement that disinflation remains on track and that we are getting closer to the point that some of the current policy restrictiveness can be withdrawn.
"And in the media conference, the Governor conceded that there were scenarios in which the Board ended up cutting in February, while prudently choosing not to describe one.
"In acknowledging that reality, the RBA has clearly tilted the probabilities back towards an earlier start date for the rate-cutting phase than where it stood a few weeks ago.
"It does not, however, shift that balance of probabilities enough to change our base case to be earlier than May just yet.
"The RBA still assess aggregate demand as exceeding aggregate supply. While ever it continues to believe this, it will be cautious about embarking on rate cuts.
"Any shifts back towards an earlier timetable depend on the data flow from here, especially on the labour market and trimmed mean inflation."
Our ABC colleague Emma Field has sent this across for the blog:
Two large mineral sands mines have been approved in Western Victoria, despite strong community opposition.
The Victorian Planning Minister Sonya Kilkenny approved the Environment Effects Statement (EES) for the Goschen Rare Earth and Mineral Sands Project near Swan Hill, and the WIM Resources Avonbank Mineral Sands Project near Horsham with some conditions.
The Goschen mine, proposed by ASX listed company company VHM Limited, is 35 kilometres south-west of Swan Hill and 275km north of Melbourne, covering 1,479 hectares of agricultural land.
The WIM Resource Avonbank mine is near Dooen, about 10 kilometres north-east of Horsham, where the Chinese-backed company is proposing to dig up 12.75 million tonnes of heavy mineral concentrate that includes critical minerals.
It comes after farmers who will be affected by the Avonbank project told the ABC last month they've received phone calls from WIM Resource saying it had been approved.
In a statement to the ASX VHM said it was pleased with the decision, which now puts them in a favourable position "to accelerate investment discussions and develop strategic partnerships as the Company progresses to final investment decision to develop the Goschen Project."
"VHM's achievement in obtaining Ministerial endorsement of Goschen's EES is a major step forward in the initiation of a new rare earth and minerals sands project in Victoria," VHM Chief Executive Officer Ron Douglas said.
Meanwhile, WIM Resources board spokesman John Bradley said the project would create an estimated 967 jobs and over 30 years and "will inject $15 billion in gross revenue across a range of industries, and $3.5 billion in gross state product within the Wimmera Southern Mallee region".
Yesterday, the Victorian government released its critical mineral roadmap and policy changes, including slashing the time it takes for proposed mines to be approved and creating Priority Development Zones for the minerals and rare earth sector.
Deutsche Bank chief economist for Australia, Phil O'Donaghoe, has issued a change in call for interest rates.
He had previously expected the first rate cut to come in May, but he's changed that to February now.
"Following a dovish tilt of the December RBA Board meeting, we have pulled forward the timing for an RBA rate cut from the May to February meeting.
"We now expect four 25 basis point rate cuts in 2025 at each of the February, May, August and November policy meetings, leaving the cash rate at 3.35% by end 2025.
"Previously, we expected three 25 basis point rate cuts in 2025, starting in May.
He says crucially, the data over the coming month will include the November consumer price index (CPI) indicator, due on 8 January, which will be key for formulating an estimate for underlying inflation in the December quarter, due on 29 January.
He says the evolution of the economy in recent months - reinforced by the RBA's assessment today - provides little reason to expect much upside risk to the 0.7% quarter-on-quarter trimmed mean print [underlying inflation] the RBA is expecting.
"Unless that November CPI print due on 8 January shapes up stronger than we expect, our base case is now for the first RBA cut in February," he said.
What do Citi economists think, now they've seen the RBA Board's statement and heard governor Michele Bullock's press conference?
Here's what they've circulated in a note:
The RBA was more dovish than we had expected in the December monetary policy meeting.
This leaves the door open to rate cuts in February, but we still see the bar to cut rates in February as high.
A lot needs to happen for the Board to cut rates in February, including that the CPI needs to be weaker than expected, unemployment rate higher than current levels, and x-mas trading activity weaker than anticipated.
We are more constructive on activity, but note risks of a weaker inflation print.
That said, we believe the timing for the first rate cut remains unchanged in May 2025.
That's from Citi's Faraz Syed and Josh Williamson.
Hi Bof,
Great questions. I guess the public can only borrow what the banks will allow them to borrow, right? If the banks are given the greenlight to be a little more liberal with their lending standards, they may comply. And borrowers will then borrow more (and then house prices will join the party).
Trading has closed on the ASX today, and trades have settled.
The ASX200 index has shed 30 points lower (-0.36%) to close on 8,393 points.
Shane Oliver, AMP Capital chief economist, says the change of language in today's RBA Board statement was significant.
"We moved to May as our base case for the timing of the first rate cut, but we think the RBA should start cutting in February and today’s RBA commentary suggests that there is now a high chance of that," he says.
"December quarter underlying inflation data in late January along with jobs and business survey data will be key."
And CBA's head of Australian economics, Gareth Aird, says he's sticking with his forecast of a February rate cut.
"The Statement accompanying the decision made an unambiguous shift in the dovish direction," he says.
"Our base case remains for the RBA to commence an easing cycle in February 2025 (i.e. at the next Board meeting). And we look for 100 basis points of easing over 2025 that would take the cash rate to 3.35%."