Market sentiment improved notably last week pushing local yields and equities higher, while the Australian Dollar continues to trade its new range around USD0.8750. Overseas markets however remain a little shaky, with slowing global growth and deflation concerns likely to see the ECB engage in quantitative easing and the US and UK central banks delay any possible rate hikes.
While I’m not an advocate for any further RBA rate cuts, I can’t stand against the market headwind at the moment.
Financial futures, mainly on the back of influences from offshore, currently have a 30% probability of another RBA rate cut factored in by mid next year (refer chart below).
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