Rate Hike Forecasts Brought Forward, ASX Closes Flat

Australia's major banks have brought forward their forecasts for an official cash rate hike, with some now predicting an additional increase in November. The ASX 200 closed flat at 8,731 points on Monday, with gains in the banking sector offsetting losses among miners.

Market snapshot

The ASX 200 was flat at 8,731 points, while the Australian dollar rose 0.1% to 71.22 US cents. In Asian markets, the Nikkei rose 1.4%, the Hang Seng gained 0.7%, and the Shanghai market rose 0.4%.

Rate hike forecasts brought forward

The Commonwealth Bank and ANZ have joined Westpac and NAB in forecasting a rate hike next week, with ANZ also predicting an additional hike in November. The banks' predictions have been reflected in the market, with ANZ gaining 0.9% on Monday.

ASX sectors mixed

The financial sector led the way on Monday, while the mining sector saw a sell-off despite higher iron ore and copper prices. The healthcare sector was also stronger, with Cochlear gaining 5.3% despite going ex-dividend.

Treasurer Chalmers on the Intergenerational Report

Treasurer Jim Chalmers released the Intergenerational Report on Monday, which projected that deaths would outnumber births in Australia by the 2060s. He said the ageing population would have huge implications for the economy and population growth.

"Fewer births mean much lower increases in Australians aged under 20 - growing just 10.4 per cent to the early 2060s, compared to almost 28 per cent forecast in 2023," he said.

"This will contribute to slower population growth, averaging 0.9 per cent annually – 0.2 percentage points lower than 2023, and a third lower than the last 40 years."

AI revolution brings rewards and risks

Treasurer Chalmers also discussed the impact of the AI revolution on the economy, saying it could lead to a productivity boost but also carried serious risks.

"AI offers a lot of upside, but also very serious risks to minimise and manage," he said.

"We already see dangerous proliferation of misinformation, scams and malicious cyber operations."