The RBA raised rates by a further 25 basis points, as expected, signalling more to come. The RBA has operated under the radar, with their monetary policy, raising rates for eight straight months, but it has been reluctant to attack inflation aggressively like most other Western Central Banks. The RBA is guarding against plunging the economy into recession and adversely impacting the property market. The AUD was softer following the decision, dropping to 0.6700, while the NZD attempts to hold 0.6300.
European and US equity markets plunged again overnight, reflecting the mood of the markets and the deepening recession. Economic data is more and more gloomy, although easing energy prices will reduce inflationary pressures. Markets will be watching the Central Banks of India and Canada, in their rate decisions and the accompanying narratives. Inflation and growth remain key to market moves. The EUR drifted back to trade below 1.0500, while the GBP weakened to 1.2170.