Daily Bulletin


  • Written by News Company

The Reserve Bank of Australia (RBA) held its monetary policy meeting at the beginning of February and decided to keep rates unchanged, but that could soon take another direction, given the low prospects for economic activity in 2019.

Philip Lowe, governor of RBA, acknowledge that a rate cut might be needed in case economic conditions deteriorate further:

“In the event of a sustained increased in the unemployment rate and a lack of further progress towards the inflation objective, lower interest rates might be appropriate at some point. We have the flexibility to do this if needed.”

Domestic and foreign influences

The Australian housing sector had longed been assumed to be in a bubble. Reports suggest one of the reasons why the RBA decided to keep rates unchanged for the 30th consecutive month in a row, is due to house prices declines in cities like Sydney or Melbourne.

Australian economy weakening

Another reason why the economy could decelerate further is linked to one of the most important Australia’s trading partners. The Chinese economy had been slowing to the lowest pace since the ’90s, which lowers the prospects for Australian exports.

A weakening global economy will have significant negative effects, affecting the already fragile recovery that followed the 2008 financial crisis. Financial markets across the globe and traders working with brokers like FXVC, Pepperstone, and City Index will find themselves in a tough position to generate returns while trading assets like stocks.

Wage growth and unemployment

As it was acknowledged by the RBA government, a big impact on the interest rate decision will be held by the unemployment rate and wage growth:

“If Australians are finding jobs and their wages are rising more quickly, it is reasonable to expect that inflation will rise and that it will be appropriate to lift the cash rate at some point,” Dr Lowe said. On the other hand, given the uncertainties, it is possible that the economy is softer than we expect and that income and consumption growth disappoint.”

A recent poll conducted by finder.com.au, suggest that out of 28 experts and economist, just 40% believe that the RBA will move rates higher. Conditions had changed dramatically over the past two years when over 80% of the experts questioned expected a rate hike from the central bank. The bottom line is that risks for the economy slowing are in line with the global picture.

Image source

The Conversation


Prime Minister on the Alan Jones Show

ALAN JONES: Prime Minister, good morning.    PRIME MINISTER: Good morning Alan, how are you? Good to hear you back on the air.   JONES: Thank you. Thank you very much. Can I just - there's a lot...

Alan Jones - avatar Alan Jones

The Greens side with activists, not farmers

The Greens’ Agriculture Spokesperson, Senator Janet Rice, today made some disgraceful comments in relation to the Government’s tough new penalties for keyboard warriors who incite activists to inv...

Senator Bridget McKenzie - avatar Senator Bridget McKenzie

Scott Morrison interview with Alan Jones - 2GB

ALAN JONES: The Prime Minister's on the line from Melbourne, Prime Minister good morning. PRIME MINISTER: Good morning Alan ALAN JONES:  thank you for your time. I wish we had three hours but look...

Alan Jones - avatar Alan Jones

Business News

Deliveroo appoints Laura Huddle as Head of Commercial in Australia

Leading online food platform Deliveroo has appointed Laura Huddle as Head of Commercial in Australia, as the platform continues to invest in building a strong and experienced local leadership team...

Sinead Harding - avatar Sinead Harding

The Most Successful Start-Ups in Australia

The future looks bright for Australia’s start-up sector. Cities like Sydney, Melbourne and Perth are beginning to be recognized as most popular Australian start-up hubs. More and more companies are ...

News Company - avatar News Company

Three important challenges small businesses face and how to fix them

Running a business can be hard, and sometimes, it can be harder than you think when first entering into this otherwise unknown world. Because of this, many small businesses in Australia are afrai...

News Company - avatar News Company


DEAL: Kids stay and eat for FREE these school holidays!

Take these school holidays to the next level with the ultimate family escape at PARKROYAL Darling Harbour. What’s more, kids under 12 years of age, can stay and eat for FREE! ...

Liana Gardy - avatar Liana Gardy

How to Book a Hotel for Your Vietnam Trip

Finding a travel destination may turn out to be challenging at times. You may have a long bucket list, which leaves you spoilt for choice on where to visit first. Going through travel blogs and site...

News Company - avatar News Company

New Allianz data reveals the ‘forgotten’ European countries attracting Australian travellers this winter

FROM SPAIN TO THE UKRAINE - THE SURPRISE EUROPEAN DESTINATIONS BOOMING WITH AUSSIE TOURISTS Australian travellers are seeking new destinations beyond the Mediterranean when it comes to European...

Media Release - avatar Media Release