Dear %%first_name%%,
Tomorrow we should get that interest rate cut all of Australia has been crying out for and there’s a good chance we could get half a percentage point knocked off, and that will be great for stocks and the dollar! But there are still risks in the market, as I talk about in my note today.
Also in the Switzer Super Report, it’s Federal Budget time and there could be some changes to super. Paul Rickard and Tony Negline have weighed in with their opinions and explain what’s going around the rumour mill so that you don’t get caught out. Plus, we have some foreign stock tips for diversifying your portfolio as well as our weekly broker wrap.
All the best for the week.
Sincerely,
Peter Switzer
There's been a lot of excitement in the air in the lead-up to tomorrow's Reserve Bank of Australia (RBA) board meeting, with just about every man, woman and their dog anticipating an interest rate cut. The recent weakness in inflation is the signal the RBA has been waiting for and the bigger question on everyone's mind is not if they will cut, but by how much.
Headline inflation has slipped to 1.9%, and the RBA's two preferred measures of underlying inflation (the weighted median and the trimmed mean) are down to 2.1% and 2.2%, respectively. The RBA aims to keep inflation within a 2-3% band, so it will be feeling a little uncomfortable following the recent drop.
The benchmark cash rate is currently at 4.25% and many in the market are hoping for a 50 basis point cut to 3.75%. The markets have already priced-in a hefty rate cut, so anything less may cause some disappointment in the stock market.
We'll post the results on the Switzer Super Report website when the announcement is made at 1430 AEST on Tuesday 1 May, 2012.