After a period where the RBA was seen to be on hold for the foreseeable future and so yield direction was driven by offshore developments, domestic fundamentals are now back in focus. The RBA Governor recently highlighted three factors that will place an obstacle to a future a rate hike: low wage growth, low inflation and a strong Australian dollar.
With GDP, employment and inflation all under the microscope, economists are changing their forecasts for monetary policy based on their view for these domestic fundamentals. Financial market pricing still has one RBA rate increase now fully priced in by July/August next year.
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 Limited 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 Limited ABN 74 083 938 416 AFSL 238042. Registered office: L6, 80 Grenfell St, Adelaide SA 5000.