Pressure Mounts on RBA to Cut Rates Next Week

Pressure is mounting on Australia’s central bank to join developed-market peers in easing monetary policy as falling oil prices and stagnant economies spread disinflation.

The Reserve Bank of New Zealand abandoned a tightening bias today and warned of negative annual headline inflation, a day after Singapore’s unscheduled easing. Those moves followed Canada and India unexpectedly cutting borrowing costs and Europe announcing quantitative easing.

“The key driver for these central banks is increasing downside risks to global inflation and growth,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “Canada talked about an insurance cut and pointed at energy, you substitute that in Australia for iron ore and dairy in New Zealand. It’s no coincidence that the commodity nations’ central banks are shifting rapidly in policy assessments.”

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.