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Australia to Keep Rates Unchanged

Australia to Keep Rates UnchangedAustralia to Keep Rates Unchanged

Futures markets have curbed their enthusiasm for interest rate hikes next year, as the impact of no growth for Australian retail sales in September troubles rate hawks, AAP reported. As the equity market comes within striking distance of 6,000 points this week—the index is poised to add 16 points at the resumption of trade on Monday, having last traded at 5959.9 points—it is clear not all is well in the economy. The yield on 10-year Australian government bonds fell to 2.572% on Friday, the biggest one-day fall since March. The Australian dollar lost 0.8% to 76.53 US¢. And the implied cash rate as of August 2018 has dropped to 1.57% from 1.63% in the space of a week, according to the futures market, where the first Reserve Bank hike is not fully priced in until May 2019 at the earliest, from December 2018. The central bank decided to hold the cash rate unchanged at the record low level of 1.5% at the meeting in October.

 

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