ASX200 Eyes Rebound as Markets Anticipate RBA Rate Cut and Miners Weigh on Sentiment

2 min read | May 20, 2025 10:58 AM AEST | By Team Kalkine Media

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ASX200 Eyes Rebound as Markets Anticipate RBA Rate Cut and Miners Weigh on Sentiment — Image source: shutterstock

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Highlights

ASX200 futures point to a strong open

RBA rate cut expected amid easing inflation

Gold stocks gain as miners and banks retreat

Australian equities are poised for a strong recovery today, with ASX200 futures up 73 points or 0.87% as of 8:30 am AEST. This comes after the benchmark index snapped its eight-day winning streak on Monday, slipping 0.58% to close at 8,295. Market focus now shifts to the Reserve Bank of Australia (RBA), which is widely expected to cut the cash rate by 25 basis points to 3.85% during its afternoon policy announcement.

A rate cut would follow recent data showing first-quarter inflation falling back within the RBA’s 2–3% target band for the first time since 2021, alongside softening global growth indicators. Markets have already priced in 74 basis points of easing by year-end, making today's policy guidance especially crucial for gauging future monetary direction.

Monday’s market retreat was largely driven by weakness in key sectors such as Energy (-1.82%), Materials (-1.55%) and Real Estate (-0.67%). This followed a credit rating downgrade and disappointing Chinese housing data, with home prices falling for a 22nd consecutive month. Major mining stocks bore the brunt of the selling, with Fortescue Metals Group (ASX:FMG) down 4.88% to A$16.17, BHP Group (ASX:BHP) falling 2.44% to A$38.75, and Rio Tinto (ASX:RIO) easing 1.31% to A$119.46.

In the financial sector, Macquarie Group (ASX:MQG) declined 3.44% to A$203.98 after trading ex-dividend, while the other major banks saw mixed performances. Notably, Commonwealth Bank of Australia (ASX:CBA) rose 1% to A$171.36, defying the broader trend.

Meanwhile, ASX dividend stocks such as gold producers stood out, benefiting from a rise in bullion prices as investors sought safe-haven assets. Regis Resources (ASX:RRL) climbed 3.37%, Evolution Mining (ASX:EVN) gained 3.18%, and Newmont Corporation (ASX:NEM) advanced 2.54% as gold prices surged 1.5% to US$3,233.50 per ounce.

Globally, US equities overcame early session losses to end mostly higher, buoyed by stable bond yields and strong healthcare sector performance. The S&P 500 rose for the sixth straight session, while European stocks also ticked higher, led by travel and leisure names. Commodity markets saw oil prices edge up due to geopolitical tensions, while iron ore dipped slightly amid muted demand from China.

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