ADDED – Apologies to all, I forgot to put this link in – its an ungated article at the Sydney Morning Herald: Weak economy set to spur Reserve Bank cash rate cut on Tuesday
The article is an analysis/opinion piece from Peter Martin, Economics Editor, The Age. Martin knows his stuff.
Added also – AUD/USD so far this morning:
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From the local Australian press this morning, another call that the Reserve Bank of Australia is to cut rates at its meeting tomorrow (the announcement will be made at 0330GMT on 03 February 2015).
Cites:
- The RBA’s preferred measure of unemployment shows it continuing to climb … abstracted from monthly “noise” there has been no let up in the pace at which unemployment is climbing
- neither consumer nor business confidence has lifted since the budget
- Inflation .. the bank expects lower oil prices to continue to weigh down on inflation … the bank is paying special attention to the rate of inflation on so called “non-tradables” – products that are not internationally traded, which is well down on where it was a year ago, reflecting low wage growth and weak consumer demand … “Tradables” inflation, the rate on products that are internationally traded, is now negative despite the lower dollar
- Another impediment is the statement the bank released after its December board meeting, saying “the most prudent course is likely to be a period of stability in interest rates”. … (but) the bank believes that enough has changed since December to release it from the commitment. The oil price has collapsed, economic growth has weakened, and the steam has gone out of inflation.
It believes that if it is clear it has to cut rates, there is little point in waiting.
If they don’t cut tomorrow, then “they are likely to indicate they intend to cut it soon, in March. But it is more likely that they will cut on Tuesday”
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It sure looks like word is getting out that there is a cut coming tomorrow.
Watch this space.
