Most commentators seem to think that interest rates will be kept steady when the RBA meets on Wednesday. Housing
prices are more-or-less settled around the nation as affordability gets
stretched, and it is unlikely in the short term that household spending will
move along much, given the recent petrol price shock. The full flow-on effect
of petrol prices has not yet been felt on price inflation however, and the lag
effect may put more upward pressure on rates in coming months, particularly if
petrol prices ease and households have more to spend
again.

Market movements will depend to a huge
degree on fuel prices, writes Henry. Read on
here.

Meanwhile, foreign banks are preparing for
the unshackling of China’s banking industry at the end
of 2006 with CBA and ANZ in the mix, writes Ray
Block
.

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