reserve bank

Yesterday the governor of the Reserve Bank, Philip Lowe, finally made clear what has been apparent for months -- that the chances of an interest rate rise have significantly diminished and the chances of a cut are increasing. He says they're now evenly balanced.

Until yesterday, the RBA had been saying the next move in rates would most likely be up. First markets expected a rise last year; then in 2019, then 2020. Now if there are any sustained signs of weakness, the bank will cut rates again. The key statistic will be jobs. At the moment, jobs growth is running at 2.3% (a little above the long-term average of 2%), and the unemployment rate is 5%. A sustained rise in the latter and fall in the former will trigger a rate cut.