Bonds/Interest Rates

Unlike most bad news over the last few months, NAB’s latest business survey and economic outlook didn’t come with a silver lining, offering no alternative to looming recession.

Having previously expected Australian interest rates would bottom at 3.5% Westpac now sees 2.75% as the low point given the weak economic outlook.

There was more slashing going on across the globe last night than a B-grade movie as central banks took the axe to rates and global companies took the axe to their workforces. The Dow fell 215.

The US government has spent that much on economic stimulus but may soon have to borrow money from itself.

Australian building approval numbers were below consensus for the fourth month in a row leading to predictions of a further 0.75% rate cut early next year.

Australian economic growth for the September quarter came in at just 0.1% and economists suggest further rate cuts are coming.

A 1% rate cut wasn’t what brokers were expecting, but it came as little surprise nonetheless.

After Monday’s big fall the Dow returned to post a 270 point rally to make six up-days out of seven. (Locked for subscribers until 10:00 AEDT)

THe RBA has lowered the official cash rate by a further 100 basis points today.

The so-called Santa Claus rally in equities is real according to Barclays Capital’s analysis of monthly trends, while conditions also favour aluminium and the euro.