The Australian share market is likely to start its day flat as investors await the Reserve Bank's interest rate hike, which is likely be a double-sized increase of 0.5 percentage points, according to market pricing.
The Australian share market is likely to start its day relatively flat, as investors cautiously await the Reserve Bank's next interest rate hike.Practically every bank and economist anticipate the RBA will lift rates this afternoon as it desperately tries to lower inflation, which has surged to its highest level in 20 years.
The debate is over the magnitude of the central bank's rate increase. According to market pricing, the most likely outcome is a double-sized rate hike of 0.5 percentage points — which would take the RBA's cash rate target to 1.35 per cent."The RBA is expected to raise the cash rate by 50 basis points which is nearly fully priced by markets," Commonwealth Bank currency strategist Carol Kong said.
"As a result, the Australian dollar could lift modestly if the RBA lifts the cash rate by 50bp as we expect." Spot gold was trading at $US1,809.12 an ounce. It was a significant improvement on last week, when the precious metal hit a six-month low .A jump in oil prices led to a surge across European energy stocks. That boosted the Stoxx 600 and Britain's FTSE indexes by 0.5 and 0.9 per cent, respectively."Some markets are starting to find their footing but there's a lot of volatility right now," Sebastien Galy, senior macro strategist at Nordea Asset Management, said.
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