Bonds/Interest Rates

Has the latest Fed move solved anything?

While interest rate differentials have supported Aussie dollar gains against the greenback, CIBC notes cuts are starting to be priced in and this suggests downside risk for the currency.

It was back to business as usual on Wall Street last night as the dollar hit new lows, oil new highs and an early rally in the Dow failed.

Consumer Sentiment is faltering, and fast, in Australia according to a monthly gauge by Westpac and the Melbourne Institute.

The Fed responded to criticism last night by not cutting rates and instead injecting liquidity directly into the mortgage market. Wall Street loved it and the Dow rallied 415 points.

National Australia Bank’s latest Monthly Business Survey confirms its view demand has peaked, leading to minor downward revisions to its growth forecasts for the Australian economy.

The Dow was down another 150 points last night as some slightly positive economic data were overshadowed by concern over the liquidity positions of major brokerages.

Westpac’s Monthly Market Outlook sees Australian growth as remaining solid this year, though with inflationary pressures persisting there is scope for further increases in interest rates.

The Dow became the last of the major three US stock indices to break its January low last night as January jobs data showed a large drop when a small rise was expected.

The S&P 500 closed below its January low last night and the Dow came closer, falling 215 points.