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Will interest rates hit a record low 2.50% next week?

It looks like it, and 22 of 28 economists surveyed by Bloomberg think so.

And so do the futures markets.

The next RBA Board meeting and Official Cash Rate announcement will be on August 6.

ASX 30 Day Interbank Cash Rate Futures August 2013 contracts are trading at 97.410 which indicates a 79% expectation of an interest rate decrease to 2.50% at the next Board meeting.

It seems that with the benign inflation print (particularly with the effect of the carbon price stripped out), the RBA has room to go again.

The market has become gradually more convinced over the last 4 trading days, with the implied likelihood of a cut creeping up from 62% to 79%...


Source: ASX

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