RBA prepared to drop interest rates?

boz

boz

let's start with this:
“We’re going to see incredibly cautious central bank action” to ensure market liquidity, “and on hard policy issues like interest rates, we’ll see central bank inaction,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong.

“The Reserve Bank of Australia’s statement this morning is the strongest example of this,” Maguire said. “The RBA raised rates on Tuesday and now they’re talking about reassessing the outlook for the resources sector which has been the raison d’être for the tightening cycle so far.”

Less Chance

Traders say there is only a 52 percent chance that Stevens will increase his benchmark overnight cash rate target by a quarter percentage point to 4.75 percent by the end of the year, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 12:35 p.m. Prior to today’s statement, chances of a move by early October were 100 percent.
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then you have to consider funds are freezing again around the world, so banks are going to get their funds backed by government again? I think so, and could be pretty soon.
May be the debt Chrisis started with greece debt problem will once again pinch the houstralia credit (debt) growth with a following commodity price slump (that is happening right now starting last few days), home price slump and interest rates following with budget deficit increasing and so on...
let's see...in any case the future of australia is NOT on australia's hands :eek:
 
Oh, just noticed Chris Zappone from the age read this Thread :cool:
Market turmoil sparks rates cut talk

Credit markets are starting to contemplate the possibility of an interest rate cut by the Reserve Bank next month, amid rising fears of European debt market contagion.

While most bets are still on rising rates, this is the first time investors have looked for lower rates since August 2009, when the economy was still feeling the effects of the global financial crisis.

This morning, Credit Suisse data showed a 19 per cent chance of a rate cut when the RBA meets again next month but by this afternoon that had been tempered to a 6 per cent chance. At the same time, most investors still expect interest rates to rise to 4.75 per cent over the next 12 months.

The change in sentiment comes after contagion fears in the wake of the Greek sovereign debt crisis escalated overnight, walloping global markets another time.
...
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they went too far from 3.5% onwards in my personal opinion (which is all that counts, let's be honest here!) :p

i think if they're looking to restrict growth, they need to let the last few rises settle into the economy. then they'll see how much further they went than was required.
 
I think the RBA needs to assess what is happening rather than what may happen. the mining boom is still a maybe... a good maybe but the world seems to change direction on a daily basis
 
I think Australia needs to wake up to itself regarding our perpetual CAD, ever growing net foreign debt, and reliance on foreign credit to fund property growth.

The rest of the world isn't impressed, which is why they expect a high rate of return on the capital they lend us.

How high? Try the 4th highest in the OECD....not that far behind Greece!!!!

And what sort of company are we keeping? Below are OECD countries, highest to lowest rate.

Greece
Hungary
New Zealand
Australia
Poland
Mexico

So, despite Australia thinking we're some kind of indestructible super economy, let's ponder why our creditors lump us in with the above.

Below is the latest bet on rate futures.

3%20yield%20curves.gif
 
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I have real trouble believing what the 'experts' say on anything these days, even when they agree with each other they get it wrong...
 
the election is just around the corner , so i would expect a little nudge to leav thev or drop them could be expected, for the "hard working famalies of Australia" that is :rolleyes:
 
Blue Card! said:
me too.

then Glennbot gets the sack.
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not if inflation starts to trend above 3%.

You cant have it both ways,
during times of minimal inflation say, nope no inflation,therefore keep interest rates low;
and
when inflation moves above the target range, say nope we cant 'afford it'.

Inflation range targets cut both ways.
For the last 10 years, we have only seen the beneficial swing.
I very much doubt the next 10 years will be so harmoneous.

Everything moves in cycles, including inflation.
 
this thread needs renaming to the wishful thinking thread

if they do feel they have to cut rates it will mean recovery was bogus like i have been saying all along. it was only the gov spending or should i say borrowing to spend that has made it look ok
 
urbanprospector said:
this thread needs renaming to the wishful thinking thread
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it is not a whishful thinking at all, I know they are going to cut. If WW is going to update his chart you can see the 30 day cash rate is already slowly going down. so market are already start to price in a interest rate drop.
then you have the usual crap from Swanny about the sound economy and we have room to drop rates and like in 2008 they are going to save us, we are the lucky country etc...:rolleyes:
 
boz said:
it is not a whishful thinking at all, I know they are going to cut. If WW is going to update his chart you can see the 30 day cash rate is already slowly going down. so market are already start to price in a interest rate drop.
then you have the usual crap from Swanny about the sound economy and we have room to drop rates and like in 2008 they are going to save us, we are the lucky country etc...:rolleyes:
Click to expand...

they pushing the yield down via currency swaps / wait and see
 
tess85 said:
There doesn't seem to be expectation of a rate drop in the IB expectation curve graph?
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that is not very accurate for long term as there are no transaction after march2011. you can see an update info on how is going here. it is pretty much flat till march 2011. but last trade for dec2010 was at 95.62 which imply a yiled lower then the 95.54 of next month.
edit: don't know why is not working i can't post the correct link, you would have to ask moderators to do something about it
 
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