Over the next couple of days, the course of interest rates could be confirmed or changed with Donald Trump catching up with his “friend” Xi Jinping at the G-20 Summit in Osaka, Japan. And what happens will be watched very closely by financial markets, as it will affect share prices, bond yields, forecasts for economic growth around the world and could also influence what the RBA Governor Dr Phil Lowe and his team do with the cash rate next Tuesday.
In turn, that will put pressure on or take it off the banks, which will be expected to pass on the expected 0.25% cut in the official rate controlled by the RBA.
Yep, a cut is the view of the likes of the economics teams at the CBA and Westpac but I bet Dr Phil would love to avoid another cut. However, history shows the RBA has often tried a pair of cuts or increases and then sat back to see if their work has done the trick.