Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Futures traders tip cash rate to rise

Staff Reporter 3 minute read

Interest rates could be on their way up in just 12 months according to local futures markets.

Traders are raising their bets that the Reserve Bank will move to tighten monetary policy with contracts for a rate rise in the futures market running at their highest in 10 months, according to The Australian Financial Review.

But while traders may speculate on a turn in the interest rate cycle, economic forecasters maintain that in the short term interest rates have further to fall.

Just last week Westpac chief economist Bill Evans said the prospect of further rate cuts had increased off the back of the federal budget and its sizeable deficit.

Advertisement
Advertisement

Mr Evans said the sharp increase in national debt would constrain the government’s ability to implement further stimulus measures, leaving the stimulus ball in the RBA’s court.

“... [monetary policy] will need to be seen to be responding when the unemployment tracks from 5.5 per cent to 8.25 per cent over the course of the next 12 months,” he said.

Westpac expects the cash rate to fall by a further 100 basis points before the year is out.

NAB also expects further rate cuts from the RBA in a bid to be seen as responding to rising unemployment and further falls in GDP.

Its latest forecast has the cash rate bottoming out at 2.5 per cent in December.

PROMOTED CONTENT



Futures traders tip cash rate to rise
default
TheAdviser logo
default

 

more from the adviser
regulation rules AFCA amends complaints rules following court case

The financial services ombudsman has changed its rules after the ...

meeting top view ta 62c1 Half of home owners wary of bank refinance advice

One in two borrowers does not believe banks always have their bes...

house sold Hot Property: The biggest property headlines from the week 18-22 January

Here’s the weekly round-up of the biggest news stories from acr...

FROM THE WEB