I note that after this morning’s data deluge, interest rate markets have reduced the prospects of an interest rate cut tomorrow from 17% to 14%. Both of these are foolishly low. I note that betting markets are even more skeptical:
Here’s a recap of this morning’s data:
- China non-manufacturing PMI neutral to weak
- Australian house prices weak
- Business Indicators had stronger than expected profits (but only on the now gone iron ore rebound) and inventories fell sharply taking some 0.3 off first quarter GDP and meaning most private forecasts will be a lousy 0.3-0.5% for national accounts later in the week
- ANZ job ads resumed their downtrend
- Retail sales were flat following last month’s plunge
- TD monthly inflation was weak
I can’t bring myself to call a cut at tomorrow’s RBA meeting but the chances are a lot higher than 14%, and they improved this morning.
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