The firm economic data releases remain a conundrum for the RBA and financial markets given the current low inflation environment. Financial markets are putting more emphasis on the latter, and the cash rate futures market is currently pricing a 60% probability of an RBA rate cut at the August meeting plus a total of 35 basis points of rate cuts by July 2017. While this week’s RBA board minutes may give a clearer picture on the RBA’s thinking, market moves should remain muted ahead of the Brexit referendum this Thursday night which is front of mind for nervous markets at the moment.
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