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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, Commodities

The US Federal Reserve meeting and weakness in China’s growth profile are both front-of-mind for the market at the moment. The US Fed is on the verge of raising rates for the first time since 2006 and will make a decision at their September meeting this week, while markets remain nervous over growth concerns and equity market turmoil in China. Current market pricing is only giving a 30% probability to the US rate hike occurring this week.

Domestically, and after the release of a weaker than expected GDP figure just over a week ago, the market is now pricing one full cut by February 2016 and 33 basis points of easing by July 2016.

Futures (forward) Market Pricing of the Cash Rate

Futures (forward) Market Pricing of the Cash Rate Graph

Source: Rural Bank

 

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