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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

The RBA has cut interest rates 12 times since November 2011, from 4.75% to an historic low of 1.50%, and some believe the easing cycle may be over (refer chart below). Although rates may have bottomed, that doesn't mean they are likely to rise any time soon, with the market still retaining a slight easing bias given the weak inflation outlook.

Therefore, many pundits are unwilling to call last week’s RBA decision as the bottom of the official cash rate cycle just yet. But given the RBA’s role as a reluctant rate cutter, many have pushed back the call for one more rate cut to mid-2017.

Clinton and Trump Polling average

US Election Update

With only a few days to go now, the US election race is neck and neck, resulting in anxiety hitting financial markets. US equities tumbled to their lowest level since July after the latest ABC News/Washington Post poll showed Donald Trump leading Hillary Clinton 46% to 45%. However, according to the latest New York Times/CBS poll, the Democrat holds a 45% to 42% edge nationally. The renewed FBI investigation into Clinton’s e-mails has raised the prospect of a closer-than-expected result, keeping markets on edge. Gold jumped, the US dollar weakened and the Swiss franc surged. Meanwhile, Mexico's peso, a barometer of Trump's prospects, weakened the most among major currencies.

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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