It'll be here
The announcement, due at the conclusion of the board meeting at 2.30 pm has been so well anticipated that the bookmaker Centrebet refused to take bets, declaring there was "not a hope in hades" of rates staying put.
"You like to have a market where there the chance of rates staying on hold is positive," said spokesman Neil Evans. "In this case there's a zero chance of rates staying put. The house would lose money."
The New Zealand agency iPredict is accepting bets and late yesterday was factoring in a 93 per cent probability of a hike.
"It's so well factored in, the market expects it," said Nomura Australia economist Stephen Roberts...
"The decision will be easily justified given strong Chinese growth, sticky inflation, double-digit house price inflation, and an unemployment rate that has declined sharply to 5.5% since the board's last meeting," said TD Securities strategist Annette Beacher.
ANZ job advertisement figures released yesterday cast a pall over otherwise healthy economic news with the index of newspaper and internet ads falling 8 per cent in January after climbing 5 per cent in December.
Drake Recruitment chief executive Matthew Tukaki said not too much should be read into the reported drop.
"January compared to December is generally a poor month for advertising. When you take into account that Australians take annual leave for at least the first and second week of January, then it’s hardly surprising job advertising drops," he said. "Who’s going to advertise when half the eligible candidates aren’t even looking."
"In our survey 78 per cent of executives rated increasing the recruitment of permanent staff as important if their company was to grow effectively as the domestic economy returned to growth".
The expected Reserve Bank hike of 0.25 point hike would lift its cash rate to 4 per cent, still below the previous cyclical low of 4.25 per cent reached in 2001.
Ahead of the move Treasurer Wayne Swan warned Australian banks not to pad their margins when passing on the Reserve Bank's move.
"Last time the three major banks increased their rates over and above the official cash rate. It was totally unjustified and the community backlash against those banks has been substantial. I certainly hope they heed the warning," he told ABC radio.
Westpac's decision in December to push up its mortgage rates 0.45 points rather than the Reserve Bank's 0.25 points lifted its standard variable mortgage rate to 6.76 per cent, meaning that a further increase today would lift its standard rate above 7 per cent and make it the first of the banks to breach the barrier.
Published in today's Age
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