Back-to-Back RBA Rate Cut Would Stir Up Memories of Crises Past
- Swaps price 25% odds of June move; 10-year yield at record low
- Wage growth data Wednesday will give next read on price trends
Forecasters and traders are in little doubt the Reserve Bank of Australia will cut interest rates again, and some are saying the specter of disinflation could warrant the first back-to-back easing in four years.
A decision to lower rates in June after policy makers reduced the benchmark this month would signal a level of urgency that the board last showed during the European fiscal crunch in 2012. Swaps traders are pricing in a 25 percent chance of a June cut and indicate the cash rate will settle around 1.37 percent in a year, from 1.75 percent now. Royal Bank of Canada is the only one of 27 forecasters surveyed by Bloomberg predicting it will come next month, with August the consensus for the next move. The 10-year bond yield on Monday fell to a record 2.20 percent.