RBA Cut Bets Build as Aussie Gains Combine With Worst Wage Rises
- Markets pricing in 1.5 percent cash rate within 12 months
- Policy meeting comes days after governor attends G-20 talks
Miners arrive back at the surface after finishing their shift at Centennial Coal Co.'s Myuna mine in Myuna, Australia, on Monday, Aug. 2, 2010. Banpu Pcl, Thailand's biggest coal producer, agreed to buy the rest of Centennial Coal Co. for A$2 billion ($1.7 billion) in the nation's biggest overseas takeover to secure supplies as prices climb.
Photographer: Ian Waldie/BloombergAustralian wage rises are the smallest on record, jobs growth has evaporated and firms plan to cut investment. Add a stronger currency and global calls for stimulus and pressure is clearly building for interest-rate cuts.
Money markets reckon that while Reserve Bank Governor Glenn Stevens might extend his rate pause at the next policy meeting Tuesday he’ll relent soon. Traders are pricing in one reduction by August and a better than even chance the cash rate will be 1.5 percent in a year’s time, from its current record low of 2 percent.