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Futures Traders Bet Rates Will Rise |
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Thursday, 28 May 2009 |
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Interest rates could increase sometime in the next 12 months according to contracts being traded in local futures markets.
According to the Australian Financial Review futures traders are increasing their bets that the Reserve Bank will increase the cash rate with contracts for a cash rate rise the highest they have been in 10 months. However, according to economists in the short term interest rates may have further to fall. Bill Evans chief economist for Westpac said that the chances of a rate cut had increased with the large deficit announced with the federal budget. He said the large national debt would decrease the ability of the government to provide stimulus measures, leaving this up to the Reserve Bank. Westpac is expecting the cash rate to fall by a further 100 basis points (1%) before the end of the year. National Australia bank is also expecting a fall in interest rates given the slow GDP figures and rising unemployment. |
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