The odds of an RBA rate cut in May jumped substantially today

The odds of a rate cut from the RBA in May are once again increasing.

Only yesterday, cash rate futures put the probability of a 0.25% cut at 48% – the first time in months that it had fallen below the 50% level.

However, after a strong rally in the Australian Dollar overnight – something the RBA is unlikely to enjoy – along with a sharp decline in Dalian iron ore futures today – the odds have jumped to 60% at the close of today’s session.

Looking ahead, the US Federal Reserve rate decision this evening – along with US Q1 GDP – will likely determine whether or not this upward trend will continue.

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