Summary:
Market expectations of an interest rate change at the next RBA Board meeting (8 July) in recent days whipsawed. On Monday, it was sitting at 75%, it dropped to 59% on Thursday (sticky CPI print), then on Friday jumped to 73%. The key catalyst? Retail sales on Friday, which unexpectedly declined in April, driven by unseasonably warm weather—which reduced demand for winter clothing—and fewer promotional events at department stores,highlighting growing consumer caution.Or does it??
Not so quick we say.Yes, it was a surprise, and it sent government bond yields plunging 10 bps and helped spur optimism that the RBA will step up interest rate cuts. Retail turnover ended its 2025 run of gains falling -0.1%mth in April to be 3.8%yr higher. However, what needs to be borne in mind is two things.First, the weakness was centred on clothing & footwear and department stores, which the ABS attributed to warmer weather delaying purchases. Retail trade rebounded in Qld (1.4%mth) following weather-related impacts last month. Excluding Qld would have resulted in a -0.5%mth fall in retail turnover. Meanwhile, NSW posted its sharpest decline in over a year.Second, the suspicion is the April read has also been impacted by holiday-related disruptions. Supporting this, the weekly Westpac-DataX Card Tracker showed significant disruptions from the late timing of Easter and its proximity to the ANZAC Day public holiday, spending only stabilising in mid-May. Seems like the bond and cash markets over reacted.
Figure 1: ASX 30 Day Interbank Cash Rate Futures Implied Yield Curve
Figure 1 ASX 30 Day Interbank Cash Rate Futures Implied Yield Curve
| Product | Interest Rate p.a. | Notes |
|---|---|---|
| AMP Saver Account | 4.95% | This is the total variable rate which applies to balances up to $500,000, made up of the standard rate and the Bonus Interest Rate (subject to eligibility). |
| ANZ Premium | 0.05% | $10,000 - $499,999 |
| ANZ Progress Saver | 3.75% | Make at least one deposit of $10 or more in a month, make no withdrawals (including transfers), or incur any fees, charges in the month. |
| Arab Bank Online Savings | 3.90% | On balances of $250,000 to $499,999 |
| Bankwest Hero Saver | 4.35% | On balances up to $250,000.99 with no withdrawals in that month |
| BOQ Fast Track Saver | 2.50% | $1000 minimum monthly deposit. On balances up to $250,000, over part the Base Rate of 0.05% p.a. applies |
| BoQ Bonus Interest Savings | 5.25% | Bonus interest is paid into your account when you limit your withdrawals to a maximum of one per month |
| CBA NetBank Saver | 4.90% | Introductory variable rate during the first 5 months of your first NetBank Saver (includes fixed bonus margin of 2.75% p.a.) |
| CBA Goal Saver Account | 4.65% | At least 1 deposit required; balance at end of month must exceed balance at start of month. |
| Great Southern Bank | 4.50% | No bonus conditions |
| Heritage Online Saver | 4.65% | a 4 month Bonus Intro Rate* available for new members on balances up to $100,000. |
| ING Savings Accelerator | 4.45% | $150,000 and over |
| Macquarie CMA | 2.75% | Minimum $5,000 |
| ME Online Savings | 4.25% | Bonus interest applies to balances up to $500,000. |
| NAB iSaver | 4.90% | This is the total rate (standard variable rate plus fixed bonus margin rate) you could earn for the first four months, if you have not held a NAB iSaver in the last 12 months (on balances up to $20 million). |
| NAB Reward Saver | 4.65% | This is the total rate (variable base rate + variable bonus rate) you could earn on your NAB Reward Saver account if you meet the variable bonus rate conditions. |
| Rabobank PremiumSaver | 5.10% | On balances to $250,000. Balance increased by $200 a month. |
| RAMS Saver Account | 1.40% | On balances to $500,000. Minimum $200 deposit each month with no withdrawals. |
| Suncorp Growth Saver | 4.80% | Minimum $200 deposit each month and no more than 1 withdrawal |
| ubank Save Account | 5.10% | 5.5% on first $100,000, 5.0% on next $150,000; applies only on amounts upto $250,000. Minimum $500 deposit each month into Spend or Save accounts. |
| Up Savers Account | 4.35% | Make 5 successful purchases using your Up or 2Up debit card or digital wallets in a month. |
| Westpac eSaver | 4.75% | 3.40% p.a. for the first 5 months for new Westpac eSaver customers |
| Westpac Reward Saver | 5.00% | Make a deposit to the account and ensure account balance is higher at the end of the month than the beginning. Keep your account balance above $0 at all times. |