Reserve Bank Becoming Less Desperate

One of the most important things to have occurred over the past week is the recovery in commodity prices. It suddenly feels like things are starting to improve in the Australian economy. This is important because it means less pressure on Australia’s economic growth and less drastic moves by the Reserve Bank. Within the space of a few weeks, the Reserve Bank is no longer as desperate as was the case in late March. If the trend continues, we could start hearing about interest rate rises rather than cuts. We think investors should be focused on what happens towards the end of the year, not what happens next week. Rates will start rising in 2016, perhaps maybe even earlier if commodity prices continue to improve from depressed levels. Read more here (VIEW LINK)