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The central bank top banker indicated the next move in Australian interest rates will likely be upward, but gradual.
RBA Assistant Governor Christopher Kent spoke at a Bloomberg event on Monday, indicating the next hike will be higher, and indicates there could be a cut if necessary.
Mr Kent was asked if there was a small chance of a rate cut next year after weak economic data released last week.
Mr Kent said the market move was modest and not to overreact to the weaker Q3 data, however progress on reaching the bank’s targets would likely be gradual.
Mr Kent also said the outlook for unemployment and inflation was positive but indicated a risk that banks might tighten credit because of on-going scandals in the industry.
Australian dollar price
The AUD/USD touched on 0.7170 over the weekend reacting to soft China data but recovered to 0.7186 on open.
Analysts say the shift could also be likely to do with the RBA’s subtle rate hike ndications from Mr Kent’s speech.
SPI futures on Monday indicating a 30-point drop for the ASX 200, this comes on the back of a relatively uneventful, but solid day for the index on Friday according to IG market Analyst, Kyle Rodda.
He says the week ahead is filled with risk events.
“The first market to watch might be the oil market, after OPEC+ agreed over the weekend to cut production to stabilize falling prices.
The trade war and the developments in it relating to the arrest of Huawei CFO Meng Wan Zhou will be curious. US CPI, PPI and Retail Sales data will be closely watched too, as traders gauge US economic health.” Mr Rodda said.
S&P futures opened around 0.70% lower on Monday, as global growth concerns persist, while AUD/USD at the time of writing, steadied around 0.7190.
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