Reserve Bank of Australia cuts by 100 bps

I don’t think anybody expected a 100 bps cut. The banks aren’t expected to pass on the full cut to the public and with a 50 bps which the markets were pricing in at the most, the housing market wouldn’t have seen much of it. Although, things aren’t as bad as in Aus, it boils down to the same issue as the bail out. At some point in time you gotta bite the bullet and the govt. everywhere seems to be trying their best not to. Inflation for the year to September is expected to be 5% and although expected to decline in 2009 would still be far above than the 2-3 % target.

I never expected 100 bps - I was thinking that 50 bps was on the high end to be bringing inflation down with the general economic outlook with regards to the largely commodity based economy.

What are they at, 6% now? They could have cut 400 bps without denting inflation, or their currency, judging by the rally.

DJIA futures have jumped 100 pts on the news. +122 now. The US market will be expecting a cut tomorrow.

yeah 6% now,

I see the Indian Reserve Bank also cut rates - I wonder if we may see some co-ordinated global action underway?

It is nice that the Aussie and Kiwi economies have this much room to move! The RBA wanted to cut rates to businesses and consumers, with funding costs sky rocketing a 50bp cut would not have gone that far. Fundamentals and inflation? They mean nothing right now, stability and avoiding a global depression is the new game. Aussie currency has fallen 6 cents since last Thurs to 72.9, 3 months ago it was at 97.5c.