Here’s the state of play before today’s May RBA rate decision.
- 23 of 27 economists polled by Bloomberg expect a 0.25% cut.
- Three of Australia’s big four banks expect a rate cut. NAB is only major forecasting rates to be left unchanged.
- Cash rate futures put the probability of 0.25% cut at 72% this morning. This is up substantially from 48% last week.
- This is the first time in 2015 that markets and economists are united in their view.
- Based on research Business Insider Australia has received most market participants expect the RBA to cut the cash rate by 0.25% and leave an easing bias in place – this would indicate that the RBA still has room to cut the cash rate below 2.00% if necessary.
- Based on current market positioning and sentiment anything other than the aforementioned will likely see the Australian Dollar rally while bonds and stocks – particularly those higher-yielding – may soften.
We’ll have live coverage on Business Insider of the announcement at 2.30pm Sydney time.