Market Commentary - July

Glenmore Asset Management

July 2025

Funds operated by this manager:

Glenmore Australian Equities Fund

Chris Gosselin, CEO of FundMonitors.com, speaks with Clint Maddock, Director and Co-Founder at Digital Asset Funds Management, about the firm's Digital Income Fund and its market-neutral arbitrage strategy in the cryptocurrency space.

Clint explains how the fund has delivered consistent double-digit annual returns with minimal drawdowns, and why growing mainstream adoption of digital assets continues to create opportunities.

Funds operated by this manager:   DAFM Digital Income Fund (Bitcoin Index Class) , DAFM Digital Income Fund (Digital Income Class)

Hedge Clippings | 15 August 2025

RBA Cuts Rates - But Is It a Victory Lap or Wishful Thinking?

This week, the Reserve Bank of Australia made headlines with a 25 basis point rate cut, bringing the cash rate down to 3.60% - the third move in the current easing cycle. The decision was unanimous and, according to the Board, driven by a "further moderation in inflation" and "easing labour market conditions." Unanimous means that six members of the board changed their views since the previous meeting held just five weeks earlier, so one has to wonder if the widespread outcry and criticism following that decision had any cognitive effect on the board?

Maybe we're being a touch too cynical, but scratch beneath the surface, and the decision should have been far from clear-cut, as outlined in our interview below with Seed's Nick Chaplin, and Renny Ellis from Arculus.

Yes, inflation is falling - the trimmed mean now sits at 2.7%, with headline inflation at 2.1%, helped along by temporary government cost-of-living relief measures which will now expire. The RBA's updated forecasts assume inflation will continue its graceful descent, conveniently alongside a "gradual" rate-cutting path. But the real economy isn't exactly booming in the background.

While the RBA noted that "private demand appears to have been recovering," it also admitted that household spending is fragile and highly sensitive to both interest rates and confidence. Wage growth is down, productivity remains poor, and unit labour costs are still elevated - hardly a recipe for sustained disinflation. However, maybe hanging on for another six weeks before the next meeting at the end of September would have been - to use a military term - "a bridge too far."

And then there's the global picture. The RBA acknowledged "elevated uncertainty," especially around trade policy and international demand, while reassuring us that "more extreme outcomes are likely to be avoided." That might be optimism, or just a polite RBA way of saying "we hope the Donald doesn't blow the world economy up."

The labour market, however resilient, is showing cracks - July unemployment (post meeting) came in at 4.2%, down from 4.3%, but is up (and trending up) almost 1% over the past 3 years. The Bank continues to hedge, saying conditions are "a little tight" while also noting underutilisation is low.

In the end, this rate cut appears as much about buying insurance against a downturn (not to mention keeping faith with the market's expectations) as it is about celebrating inflation control. The RBA is clearly worried - but doesn't want to say so too loudly.

As always, the Board said it will remain "attentive to the data" - and ready to act. Whether that means more cuts or a hasty reversal remains to be seen.

Cautious optimism? Or cautious back-pedalling? We'll know more when the next round of CPI, wages, and spending data lands, ready for the next RBA meeting at the end of September.

Australia's real issue is productivity, and next week's talk-fest in Canberra is sounding more and more like a PR exercise, with Albo promising not to do anything that wasn't on the election agenda - which we presume is good news for his wedding plans. Labor is assured of being in government for at least two terms, so surely they should have the confidence to be bold? Or could it be caution again? They'll have to wear responsibility and the outcome (as will the rest of us) beyond the next election, and possibly the one after that, so better they don't rock the boat.

Video

Expert Analysis of the RBA's August 12 Rate Decision

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