The bond market has completely removed any chance of an easing in 2024, making Australia the only major economy where rates could rise.
quashed hopes of relief for households and price growth in services proved decidedly stubborn despite the Reserve Bank of Australia’s past 13 rate rises.
The shift in interest rate expectations tracked the United States after surprisingly strong domestic price growth in March spurred worries that inflation is becoming entrenched.Australia is the only major economy where traders are primed for the chance of a rate increase. Even in the United States, they are betting the Federal Reserve’s next move is down.
This compares with one basis point, or a 5 per cent chance of a rate rise to 4.6 per cent at the RBA’s policy meeting on May 7. Before the data, the market had ascribed a 9 per cent probability to a rate cut next month. In the currency world, the Australian dollar struggled to keep Wednesday’s gains when it climbed to US65.29¢. It traded at US65¢.
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