After week of turmoil, the market’s eyes turn to RBA

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The RBA is expected to announce the end of its $4 billion a week bond buying program to pump money into the economy and analysts will be looking for clues on the timing of any interest rate hikes | nickbonyhady

All eyes will be on the Reserve Bank of Australia this week as its board meets on Tuesday to discuss its $4 billion a week bond buying program and interest rates against a backdrop of rising inflation that has roiled financial markets.

Tuesday’s meeting will be followed by an address from governor Philip Lowe to the National Press Club on Wednesday, where he will face questions about the central bank’s strategy and the likely timing of any future rate rises. On Friday, the RBA will release its assessment of national and international economies in its statement on monetary policy.

Its ultimate course could depend on wages growth, which was at 2.2 per cent in the September quarter in contrast to- though economic conditions have shifted between the two data periods. Globally, there is a divergence in the world’s central banks on the question of rate hikes, with the Bank of England expected to unveil its first back-to-back interest rate hikes since 2004.The anticipated move to 0.5 per cent by the Bank of England would also unlock the potential for policymakers to begin unwinding their bond holdings in March, a watershed event after more than a decade of near-constant expansion.

 

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