Money markets predict central bank Governor Glenn Stevens will hold Australia’s cash rate steady for at least a year. History suggests he’ll spring a surprise.
Stevens, 55, has either raised or cut the benchmark rate 26 times since his tenure began in September 2006, the most among major developed-world peers, according to data compiled by Bloomberg. His activism puts him closer to central bankers in commodity-rich developing nations like Brazil than wealthier countries in Europe and North America.
Traders are pricing in no chance of an increase in the Reserve Bank of Australia’s cash rate in the next 12 months, according to a Credit Suisse Group AG index, as a waning mining-investment boom, forecast rise in unemployment and renewed currency strength prompted the authority to keep its easing bias intact after cutting the benchmark to a record-low 2.5 percent. Working against that bet are accelerating home price gains in one of the developed-world’s costliest property markets.
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