The coordinated action by the world’s central banks this week has probably made a rate cut next Tuesday by the RBA more likely, that is according to the ‘general wisdom’ in the market. The RBA does not meet in January, so this will be the last chance before February. Glenn Stevens has shown in the past that he is still quite bullish on the Asian growth situation and also that he has no problem with sitting on his hands for extended periods, so a rate cut is definitely not a certainty in my book.
(Edit: 11 out of 19 economists surveyed by Reuters expect a 25bps rate cut next Tuesday)
