Uncertainty around the Trump administration hit financial markets late last week as the ‘flight to safety’ to both safe-haven assets and currencies continued and equity markets fell sharply. Expectations of a June US rate increase have also receded, leading to a drop in yields over the last week.
Locally, despite another stellar employment number and the unemployment rate falling to 5.7%, the RBA is expected to leave the cash rate at 1.50% for 2017 and into 2018 as it balances a soft labour market and low inflation against a “too strong” housing market.
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