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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, Commodities

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).

Graph

Source: www.ruralbank.com.au

 

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