How did investors get the RBA’s interest rate call so wrong?
The central bank has of late blown-up so many of its media voice pieces – wording them up only to change its mind – that traders have stopped paying attention.
Those monetary policy mavens never cease to entertain. The big news during the week was the “shock” around the Reserve Bank of Australia’s decision to not cut rates at its July board meeting while nevertheless signalling that a decent dose of cost of capital relief is still coming.
Although markets were badly burned by the event, it has not stopped them from handicapping an August rate cut as another all-but-certain likelihood.
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Christopher Joye is a portfolio manager with Coolabah Capital, which invests in securities, including those discussed in his column. Connect with Christopher on Twitter.
