BAA moves Jurenko up

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RBA pulls brakes as it closes in on zero interest rate

first_imgExperts including CBA believe RBA won’t move on rates again until February 2020 when it will drop the cash rate target to 0.5 per cent. Picture: Brendon Thorne/Getty Images.The Reserve Bank will hold off on any further cuts until February, as it slows Australia’s plunge towards an unprecedented zero interest rate in 2020.Two thirds of economists and experts in the latest Finder Cash Rate Survey believe RBA will keep its powder dry at Tuesday’s RBA board monetary policy meeting, opting instead for a February cut to a record low 0.5 per cent. One fifth think that rate cut will still happen this year at the RBA board meeting three weeks before Christmas. MORE: Property sales ramping up Holiday home of toilet brush pioneer for sale Upyards the new way of life More from newsParks and wildlife the new lust-haves post coronavirus11 hours agoNoosa’s best beachfront penthouse is about to hit the market11 hours agoVideo Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:36Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:36 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p360p360p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. 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Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenHow much do I need to retire?00:58 Finder insights manager Graham Cooke warned the RBA’s cuts have had little impact so far, “We’ve seen multiple references to the RBA firing blanks with these cuts and running out of bullets in the process. If true, it’s hard to believe that flogging the same horse will produce a different result,” he said.“The RBA has not spoken fondly about negative interest rates in other countries, so I’d expect extra cash to be printed before we see a zero or subzero cash rate.”Mr Cooke said “market behaviour is hugely driven by psychology and we need to be careful not to talk ourselves into a recession”. The Australian Stock Exchange RBA Rate Indicator has also swung strongly against a cut now. “As at 1 November, the ASX 30 Day Interbank Cash Rate Futures November 2019 contract was trading at 99.265, indicating a 7 per cent expectation of an interest rate decrease to 0.50 per cent at the next RBA Board meeting,” an ASX statement said.Michael Blythe, chief economist of one of Australia’s Big Four – the Commonwealth Bank – was among those favouring a February cut to 0.5 per cent.Mr Blythe said RBA already had three cuts “in the bag” this year and had a strong “belief that some aspects of UMP (Unconventional Monetary Policy), like negative rates, are ‘extraordinarily unlikely’”.“The market is questioning whether the terminal rate will in fact be 0.5 per cent or lower,” he said. FOLLOW SOPHIE FOSTER ON FACEBOOKlast_img read more