The 10 critical things to consider ahead of today’s RBA decision
- The Bloomberg survey says 20 of 27 economists expect the RBA cut today
- Just 9 of 26 economists correctly called the rate cut last month
- Of the 9 who were correct last month, 7 expect the RBA to cut today
- Westpac was correct last month and is ranked as the top RBA forecaster. Westpac economists and the bank’s CEO are calling for a cut today.
- The OIS market is 51% priced for a cut after hitting as high as 80% before the CPI numbers
- Interbank futures price a 60% chance of a hold
- All market-based metrics, show that a cut is virtually certain by year-end
- Herald Sun columnist McCrann says the RBA will hold but he has a nearly unblemished record of being wrong this year
- David Uren at The Australian (who is much better than McCrann) says there is a less than 50% chance of a cut
- The RBA has adjusted interest rates in Nov in every year since Stevens took over in 2006
This is one of the toughest calls in a long time — even tougher than the US election. My best guess is that they hold and AUD/USD rallies above 1.04.