With a lower Australian Dollar, the chance of a rate cut before Christmas has fallen from 60% at the end of September to currently less than 10% - although the market will want to see the Dollar lower and for an extended period to completely eliminate expectations of another rate cut.
The futures market has priced in the first rate hike by December 2014, with one 25 basis point hike every five months from then until the end of 2016 (refer graph below).
Disclaimer: Whilst all care has been taken in compiling the information, the information should not be relied upon as substitute for professional advice where necessary. Rural Bank Limited accepts no responsibility for the accuracy, completeness or timeliness of the information and disclaims all liability in relation to any loss or damage suffered by the use of or reliance upon any information contained herein or in any attachment or annexure hereto by any person. Rural Bank Limited ABN 74 083 938 416 AFSL 238042.