No rate cut but RBA leaves door open; Woolies cuts prices; Virgin set to list in June

Published Apr 1, 2025, 5:00 PM

Wednesday 2 April 2025

The Reserve Bank leaves interest rates on hold but hints that there could be a rate cut in the future. 

  • Woolworths starts reducing prices as it tries to be more competitive against Aldi. 
  • The latest streaming service in Australia kicks off, against some fierce competition. 
  • Prime Minister Anthony Albanese rejects American suggestions that Australia’s PBS and news bargaining code should change
  • And Tinder turns to AI.

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Today on Fear and Greed. The Reserve Bank leaves interest rates on hold, but hints that there could be a rate cut in the future. Woolworths starts reducing prices as it tries to be more competitive against Aldi, and the latest streaming service in Australia kicks off against some fierce competition. Plus Prime Minister Anthony Albanese rejects American suggestions that Australia's PBS and news bargaining code should change, and Tinder turns to AI. Welcome to Fear and Greed. Daily business news for people who make their own decisions. It is Wednesday, the second of April twenty twenty five. I'm Michael Thompson and good morning Sean Aylmer.

Good morning, Michael.

Sean, the main story this morning. There will be no pre election rate cut, with the Reserve Bank yesterday keeping the official cash rate on hold, but it says it is ready to cut rates if the Trump tariffs trigger a recession. Similarly, it is ready to hike rates if inflation starts to rise again.

In leaving rates on hold. After the Reserve Bank Board met yesterday, the Central Bank singled out recent US tariff announcements, saying they're having an effect on confidence globally and I quote and this would likely be amplified if the scope of tariff's widens or other countries take retaliatory measures. Now, of course, it comes ahead of Donald Trump announcing reciprocal tariffs in the next twenty four hours or so. The Reserve Bank said the tariffs could send inflation higher, but they could also send inflation lower. Governor Michelle Bullock said that she expects some permanency to the current round of higher tariffs. It was the first meeting of the newly formed Reserve Bank Monetary Policy Board and included two new members. Ms Bullock said the announcement of no change to rates was a consensus decision. Not quite sure what the consensus this is. I think that means that most people agreed with it, but not everyone. It's not a unanimous decision. It's a consensus decision. Like more transparency, please please, The governor said the world was gradually getting more confident about interest rates and inflation. She said current rate settings are mildly restrictive, but she warned that there is still tightness in the labor market. That's always been something she's been concerned about and the statement that central banks love to make. At the moment, it seems prudent to wait and get a bit more data, a bit more information.

Oh, there is never quite enough.

DTA is never And no one else in the world uses the word prudent like a central bank uses the word prudent.

Oh, it's just got a nice ring to it. Michelle Bullock's comments about inflation are positive. She clearly thinks that the Reserve Bank is getting control over inflation. What about economic growth.

Well, I think the main comment she made, and i'll quote her, w in fact forecast that growth will pick up a bit as people are starting to spend a bit more. We expect that to continue. We're not forecasting recession in Australia over the next twelve months. So that's pretty good news in all. She then added, of course, there's plenty of uncertainty around the place. You's got to worry about tariffs, et cetera, et cetera. Asked about the looming election, she said it didn't play a role in the decision yesterday.

Okay, all right, how did local markets react? Well?

Following the announcement, Bond markets reduced expectations that the Reserve Bank will soon cut the cash rate. There was only marginal. In fact, they're still pricing in about a seventy five percent chance of a rate cut in May. The flip side, a number of market economists think there won't be a reduction until the second half of the year. In terms of equities, the local chair market closed up one percent after its big drop on Monday. Dropped about one point seven one point eight percent on Monday. It was up a fair bit and then they had the rate announcement. It actually went further, so it closed one percent higher. All eleven sub industies rose, led by the property stocks, utilities and telcos and Michael the Yussie dollar is buying sixty two and a half few urs cents.

It seems a good time Sean to mention. Today's interview after the show uspeaking with Anika Bradley from UNI Super.

Yes, so we talk, well, it's really about portfolio construction. We have so much volatility in markets at the moment. What should you do And the answer is have a really strong portfolio and think about diversification, don't panic. How you handle these volatile times And that's what we talked to Anico about.

Yeah, it is a good conversation coming up after the show, so don't go anywhere. Shown on the eve of presidential Donald Trump, he's very pretty well.

I'm not sure that he is presidential.

Well his role as presidential. On the eve of him outlining reciprocal tariffs against trading partners, Prime Minister Anthony Aberanezi has hit out at US complaints involving the local Pharmaceutical Benefit Scheme, the PBS, the news Bargaining Code, and biosecurity as well.

So Donald Trump has formally accepted long standing grievances over Australia's subsidized medicines scheme, agricultural biosecurity rules and regulations forcing tech giants to pay local news organizations for content. We have been arguing about this from about a decade now, and the free trade agreement that the US and Australia has has sort of settled it no more. The US's annual Foreign Trade Barriers Report lists what American officials regard as de facto protectionist measures discriminating against US exports. It comes ahead of the US imposing sweeping tariff globally. We'll find out what they are in the next twenty four hours or theoretically we will now that annual report could well be the basis of what's considered a tariff by the Trump administration. But Anthony Albanezi, campaigning in Adelaide yesterday was pretty stride and he said, I have very clearly indicated Australia is not negotiating over the pharmaceutical benefit scheme, we are not negotiating over the news bargaining code. We will not undermine our biosecurity.

Okay. Aside from kind of the ever present threat of tariff's, what else is happening on the campaign trail.

Opposition leader Peter Dunn yesterday promised one and a half billion dollars to complete the Melbourne air Port rail link. Also, the opposition said it would lower serviceability ratios to boost borrower's capacity to find money for a home loan. Both sides were on the attack really, with debate ranging from healthcare to housing affordability and the Chinese spy ship off the coast of Australia. Mister Albernezi was in Adelaide says he'll officially launch the ALP campaign in Western Australia in April thirteen. That just shows how important that state is to the poll. We also found out that the first election debate between the two leaders will be held on April eight. That's a week from yesterday.

That's exciting, but you know it's even do you know, it's even more exciting.

Show I do, I do, But please tell the listeners okay, it is what is coming up at midday today, which is a new bonus episode.

It's not going to be around forever, only for the next four and a half weeks or so. It is called Politics and Stuff.

That's an original name, isn't it.

Indeed it is. We are in greed politics and Stuff, and we are going to take a look at the key issues, where the leaders are, what they are saying, what matters, what the AAC is saying, where you need to vote, all the nuts and bolts of the election campaign and how it affects us all.

We'll be running at every Wednesday up until the election. Yes, if you want to keep across what's going on, what the parties are saying, that's the podcast you need.

Yep, it's coming out today at midday Sean, don't miss it. In the meantime, we've got a lot more still to cover. We'll be back in a moment with the rest of the day's business news. Sean Virgin Australia is planning to list on the ASX in June after a five year absence.

The company and its executives met with prospective investors yesterday for the first time in a couple of years and a road show build. As a business update, however, it floated a timeline of raising capital in May and listing on the Sheer market, according to the Finn Review. At the same time, Virgin has restructured into a public company, which needs to do before listing. Private equity group BAN is the majority owner of Virgin Guitar Airways nowadays has twenty five percent of it as well. It's delisted from the ASEX in late twenty twenty after falling into administration. It's tried to relist previously, hasn't quite gotten there, but it looks like it's on track this time now.

I find this one interesting. Sean Woolies has been cutting prices hard to reduce the gap between its groceries and those at Aldi, which has made a name for itself with discounting.

That's right, so the gap between the majors in Aldi fell to their lowest level in two years. In recent months, according to a report from JP Morgan, not just Woolies but Coals as well. JP Morgan's price check of one hundred home brand products across the big supermarket groups found items at Woolies and Coals were seven point eight in eight point five percent more expensive than Aldi. That's actually better than what it was. JP Morgan says both major supermarkets are attempting to reposition their value perception ahead of the Australian Competition and Consumer Commission's final report into the industry, and of course the federal election which is being played around the cost of living. Meanwhile, consumer advocacy group Choices December quarterly grocery basket survey found Aldi to be the cheapest in a basket of fourteen commonly bought grocery items in cleaning things like them, taste of Cheese, beef, mince, penne Pasta. Choice has been provided with gouvernment funds to research supermarket prices at Aldi, Willies, Coals and IgA as part of the crackdown on the sector.

We talked about Aldi's dishwashing tablets before You're a fan. Yeah, the logics Platinum Yeah, twelve bucks compared to like twenty five dollars or the other one excellently top not twash. There you go, there's an advertising campaign top not Twash. Warner Brothers Discovery Max. The new streaming service Sean launched this week in Australia. It'll cost but eleven ninety nine is a special introductory price for their standard package. That's if you don't want ads. If you want premium, it'll be seventeen ninety nine a month. It's big selling point is HBO all the content that comes from HBO, from The Sopranos to Succession and Game of Thrones and a whole lot of other titles. But the big challenge, right is that it is entering a very very crowded market.

Yes, so this is just an excuse for us to look at the streaming market in Australia. Really.

Oh yeah, I mean, how much room have you got in your viewing schedule? Shot?

The sad thing is that all of these ones, if my household has a subscription to all of them now, Netflix remains the king six point two million subscribers according to tell site, and all our numbers are on tel site. Thanks to tell site. Aight ninety nine ad free the go to streaming service. I would say number two Amazon Prime four point eight million subscribers add for its twelve ninety nine. It's actually relatively cheap, but not as much content as Netflix.

And the main reason you get that is because you get the delivery. It's a free delivery with Amazon.

Now number three Disney Plus done a really good job growing their business here three point one million. It's quite expensive. It's almost twenty one bucks ad free. Number four stand two point six million, seventeen dollars a month. Standard was number two for a long while, now number four. The big question around that is what owner nine will do if it sells at stake in domain? Is that with around billion dollars to spend, does it go hard on streaming? We'll see. Number five is Paramount Plus one point eight million. It's cheap nine ninety nine add free, not as much content. I got to say Jackie Loves nineteen twenty three, the show Oh I've watched It, Oh Dad Living on bing Binge one point six million subscribers. It's got a bunch of tears, but around nineteen dollars a month add free in Apple TV's twelve ninety nine a month Apple is it's sleek, but I got to say it's very limited content. But the content that's there is really good. They don't do third party deals, they only do their own content. Then you've got all the freeware services of course, niche players like Big Box, AMC Plus, et cetera.

The one that is going to struggle most, you would think, will be Binge now because that is where all of the HBO content has been living up until now, and now it's just across, heading across.

Not immediately, it'll take some time, but.

Yeah, but even even things like White Lotus, which is the hottest show in the world at the moment, your favorite. Yes, that's right. I'm not alone in that, and it is transitioning across from Binge to Max. Turning to international news, Yes, now, Michael Sean getting back on track. French politics. It's always dramatic, it is, right, though the last thirty six hours, you've got to say, have been particularly remarkable. A French court has convicted Marine Lapen of embezzlement and barred her from seeking public office for five years, which is actually a much bigger deal in it sounds.

Yes, so Marine Lapen is a leading presidential hope of the far right, very nearly toppled Emanuel Macron in the last election. Has run in the last three elections, maybe it's even four. Certainly three elections she has. The Pen's lawyers said that she would appeal a verdict, but she'll remain ineligible while she does so. She's probably ruled out of the twenty twenty seven presidential race. She was also sentenced to two years under house arrest. Now her party is called for mass protests in response to the ruling by the three judges. The court found that a system of fake contracts and jobs help the Penz party siphon off about four point four million dollars of EU funds by using parliamentary assistance in Brussels to work for the party in France. So broad are the political implications, and even some of her opponents are just saying I think that Paris court went a little bit too far. But it is quite I mean, I suppose it's the equivalent of saying Anthony Albaneasy, we're barring you because of well, I don't want to say anything out is ever sorry?

It probably better?

Is actually it a done? But not that they're embezzling, but it's questionable where the marine Lapin has been rightly convicted. Yep, I'm going into legal territory here. I'm just watching an extraordinary, extraordinary decision.

Yeah, certainly. Shall we talk about Tinder, Sean?

Yeah, yeah, you don't normally say that to me, but.

Yeah, bizarrely it could be safer ground for you. Right now, Tinder has unveiled an in app game that invites users to flirt with artificially intelligent chatbots. Well that's what you like. What have we become? This is part of a larger effort to return the dating app to growth by boosting user engagement.

So it's called it's part proof of concept, part marketing stunt. According to Bloomberg and Tender is using open ais Chat GPT to generate short, highly exaggerated rom com scenarios. Okay, a stranger reaching for the same shopping basket at a grocery store, when someone whose luggage got switched up with yours at airport baggage.

They usually romantic scenarios.

And talking to the bot which initiates the scene, users can accumulate points for warmth and curiosity, receive real time feedback on their responses, and ultimately sort of win the game for our character verbally agrees to a date. It's got like a practice session. It's limited to five per day, in about three minutes at a time.

Now.

It's only offered in iOS uses in the US at the moment, But.

I would dearly love to be able to get that and for us to do a live critique of your flirting style.

So I've got to say Tinder like post my time. I'm older than you, so I didn't ever have the opportunity. I don't know that's quite the right word to use. Tinder, So I don't know much about it. People about swiping left and right, but that's.

Which ye well, Charlotte, I have been together for twenty years this year, so Tinder as well, and truly kind of I do not know, But I would dearly love to see you in the studio right here. I'll look over your shoulder and watch you as you do it, and I will describe.

What's going on, what's going on right now.

I'll please please. That will make my dreams come true. It's a weird thing to say. Up Next is the.

Fear Okay, Up Next is a Fear and Greed Daily Interview. With Anika Bradley from unicuper. Michael's gone, he's off laughing in the distance. That's up next to the Fear and Greed playlist on your podcast platform or at Fearangreed dot com. That are you, And of course Michael's back. Of course, today big day.

It is newsletter day.

Sure, his newsletter day. And most of you probably have it in your inbox already. Will those that have signed up probably haven't. We're we're setting out at earlier nowadays.

That's right, and we've got some very very exciting news coming soon about the newsletter. So if you haven't signed up already, go along with Fearangreed dot com dot au, pop your email address in and you will be privy to this exciting news. Thank you, Sean.

Thanks, Michael.

It is Wednesday, the second of April twenty twenty five. Make sure you're following the podcast and please join us online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael Thompson and that was Fear and Greed. Have a great day.