As global equites flirt with record highs and investors shrug off the unpredictable nature of US President Donald Trump’s trade policies, local fund managers are banking on interest rate cuts to push the smaller end of the sharemarket even higher.

The Reserve Bank of Australia has already cut the cash rate twice this year to 3.85 per cent, with at least two more tipped by Christmas. Hopes for further easing, along with a trade truce between the US and China, propelled the S&P/ASX 200 Index to a fresh high on Wednesday.

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