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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

The Reserve Bank meets again this week and is almost certain to leave rates on hold for the 14th consecutive meeting. Financial market expectations of future RBA rate increases have been very volatile recently (see chart below).  Just before the October RBA Board meeting, expectations of a rate hike by June was fully priced in and the probability of another hike by the end of 2018 was just above 50%. Weak economic data releases over the last month (retail sales and inflation) have unwound these expectations and now the markets aren’t confident that rates will rise at all next year, despite the unemployment rate falling to a four-year low.

Interbank financial futures pricing of the cash rate

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Source: Rural Bank


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 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 – A Division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL 237879