Rates to fall 0.5 per cent next week

Futures markets have fully priced in a rate cut by the Reserve Bank board when it meets next Tuesday morning. Markets believe that the RBA will cut half a per cent off the official cash rate from 7.0 per cent now to 6.5 per cent. Interest rate markets are positioned for interest rates to fall by 1.4 per cent over the next year. Macquarie Bank said the world is experiencing a massive shock to the financial system with households and businesses now less likely to borrow, spend or hire. Westpac said it was expecting a 0.25 per cent rate cut next week.

Source: The Australian