Bonds/Interest Rates

Weak economic data across the globe extinguished a week of rallies last night sending the Dow down nearly 700 points.

The last four months have seen both interest rates and expectations fall on a monthly basis, but is 2.5% too far?

The TD Securities-MI Monthly Inflation Gauge for November recorded its sharpest fall in the six year history of the index, suggesting inflation is no longer an issue for the Australian economy.

Markets had a week to remember last week, but with local GDP data and an RBA rate decision on this week’s calendar, did Christmas come too soon?

Australian capital expenditure in the September quarter matched market expectations, leading economists to suggest growth may stay positive through to the end of the year.

US mortgage rates had their biggest one day drop on record last night as the government announced yet another loan facility. The Dow was up 36.

The Dow closed off its highs to be up 396, but has managed to put together the first two-day rally this month.

The Westpac-Melbourne Institute Leading Index fell sharply in September and bank chief economist Bill Evans suggests this implies weak growth through the first half of 2009.

The need for the recent run of big rate cuts is undeniable, that more cuts are coming is inarguable, so the question is: What is neutral?

With the September quarter Wage Price Index lower than expected, the RBA has more scope to cut rates to deal with the weakening economy.