The expected speculation about an interest rate cut is underway as expected before the Australian Reserve Bank Board meeting on the first Tuesday of every month. One bank pundit on Friday put the odds of a 0.25 percentage point cut at 50:50 but traders have a vested interest in promoting a contest as exciting.
That 50:50 split seems a bit high to me. I expect the Reserve Bank will do the prudent thing and wait until it sees that the federal government actually delivers its promised tough budget before making a decision.
And the Crikey Interest Rate Indicator agrees.
I recommend taking some of the $1.54 available on Betfair about there being no change.
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