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Reserve Bank of Australia rate unchanged for two years

Published: Tuesday 07 August 2018

  • UK housing data awaited
  • ‘Bretoric’ should be a ‘thing’
​​By David Johnson
After a very quiet Monday, the markets got back into action overnight with news that, as widely forecast, the Reserve Bank of Australia (RBA) kept its base rate unchanged at 1.50% early this morning (UK time). So that’s two years of no change, despite all manner of calls for hikes and cuts. The RBA lowered its inflation forecast, a definite nod to lengthening the odds on any kind of early rate hike. So we may see them sit tight at 1.5% for quite some time. The AUD is weaker on the news, but not by much.
European data disappointing
The European start to the day came in the form of very poor German data. Their industrial production figures contracted by 0.9% in June; twice as bad as forecast, and their trade surplus fell to €19.4 billion Euros. That was in contrast to market forecasts of growth to €21 billion or more. The Euro is weaker against the resurgent US Dollar, but Sterling is lower against the Euro. Mind you, the Pound has its own problems…
Pound awaits lifeline from housing market
As I write, we are awaiting the Halifax House Price Index for the UK and the forecast is for 2.7% growth on the year. If the actual meets the forecast, the Pound could regain a little upward momentum. It starts the day just below €1.12 and just above $1.2950.
This afternoon brings minimalist levels of US and Canadian Data, so it may be a quiet day. With most of the UK sweltering, that lack of activity may well be welcome.
‘Bretoric’ continues…
Mind you, the Brexit rhetoric continues apace. Maybe it should be called ‘Bretoric’ by now, such is the tendency for news agencies to portmanteau names these days. But I digress, the outrageousness of some of the claims being made over the various Brexit outcomes are quite extraordinary. If you believe them all, a no-deal Brexit, or a hard Brexit, or pretty much any kind of Brexit is going to cause mass violence, rioting and lawlessness. It may also cause street parties and extreme tea drinking. We will have to see.

The list

Jacob (92) and Rebecca (85) are all excited about their upcoming wedding.  They go for a stroll to discuss their plans and on the way go past a chemist.

Jacob suggests that they go in.
Jacob asked the pharmacist, "Do you sell heart medication?"
Pharmacist,  "Of course we do."
Jacob, "How about medicine for circulation?"
Pharmacist, "All kinds."
Jacob, asks "How about medicine for rheumatism?"
Pharmacist,  "Definitely."
Jacob said, "Becky,  what’s that condition you’ve got? Oh, angina. Do you sell angina medicine?"Pharmacist,  "Of course."
Jacob,  "What about vitamins and sleeping pills?"
Pharmacist, "Absolutely."
Jacob turns to Rebecca: "Seems you were right sweetheart, this is the perfect place to register our wedding gift list."
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