Morning Report Tuesday 21 April 2015
I look forward to answering lots of your questions during today’s Webinar!
Reserve Bank of Australia Governor, Glenn Stevens has just hinted at another interest rate cut in Australia, a move that would take the Official Rate to an unprecedented 2%. While the RBA has clearly been concerned at continuing to pump up property prices, they have signalled a willingness to cut interest rates again to help stimulate economic growth as our mining sector continues to be a drag on all fronts. The local banking sector has fallen 4.4% over the last month, while the ASX200 only fell 2.4% as the market started to discount the possibility of further rate cuts in 2015.
• I still see the Australian 10-year bonds making one final high in 2015 which implies we get one more cut and the market probably goes through a period of renewed optimism for a second cut – see chart 1.
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