- The Reserve Bank of Australia (RBA) is in a bind. Meagre growth, lacklustre jobs figures and almost non-existent demand cornered it into cutting the official cash rate by 25 basis points to 2.25% – a new record low. But with steaming residential property markets in Sydney and Melbourne, many are asking whether this will simply fuel the fire of further property speculation.
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- The graph below captures the quandary facing the RBA. Commodity prices have taken a nose dive over the past year. Although there has been recent spikes in the price of benchmark iron ore (which accounts for over one fifth of Australian exports) this is not expected to hold and ANZ is tipping the average price per tonne to rest at $US58 for 2015. Which is unwelcome though not unexpected news for the small and medium sized producers already travelling in or near the red.
This update does not constitute financial advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek professional advice before acting or relying on any of the content.