Traders trim RBA easing bets amid de-escalation of US-China trade relations — Bloomberg

Bloomberg reports that traders are slashing their bets on significant monetary easing by the Reserve Bank of Australia (RBA) as trade confrontation between the US and China is de-escalating. 

At the moment, money markets are pricing in three rate cuts from the RBA this year, with one expected during the next meeting on May 20. 

Earlier, traders forecast five reductions in borrowing costs in 2025. They expected that the central bank would be pushed to ease monetary policy significantly in case of lower demand for Australian goods in China or a global recession. Alex Joiner of IFM Investors believes the US-China tariff pause will allow the RBA to focus on Australia’s economy. 

However, some analysts think uncertainty stemming from US President Donald Trump's tariff measures could force the regulator to cut borrowing costs deeper. Citigroup's Josh Williamson expects the RBA’s rate to end the year at 3.1% following four 0.25% reductions.