Australian bonds tumble following firm US data
On Friday, Australian bonds dipped reacting to strong American economic data or to be exact the US jobless data, which offered a+11k surge.
The PMI outcomes are definitely in contrast with the Fed’s chief cautious approach to the sustainability and pace of the US recovery. Market expectation as for American rate hikes are still soft as they follow a recent dovish statement made by Yellen.
Meanwhile, on 5 April, the Reserve Bank of Australia is about to issue its third policy statement for this year. The country’s major financial institution is expected to leave its cash rate intact or 2%. The RBA is going to monitor recent market disturbances, simultaneously keeping its monetary policy unchanged.
Furthermore, Stevens, the RBA governor in his last statement pointed out that further interest rate cuts are still actual, but the long-term risks of extremely low rates or simply excessive leverage should be considered too. He added that the country’s real GDP is surging at rather a slow pace, while the lower AUD and easy monetary policy are supposed to power a moderate economic growth.