In light of the tremendous volatility in global equity and commodity markets, starting in China and spreading to the rest of the world, analysits are revising down global growth forecasts. This has led to the local markets now pricing an 84% chance of a 25bps rate cut by December 2015 and a 38% chance of a further cut down to 1.50% by June next year. These odds are substantially higher than the previous week indicating cash market participants are increasingly in the view the RBA will cut rates at least once, and possibly twice in the next 9 months.
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