- September 13, 2010
- Posted by: admin
- Category: Finance News
We now find that the markets have turned around and are predicting a rate hike by December with a probability of around 50%. That probability increases to 100% by April next year but stops with only one move priced in.
I don’t expect the move to be quite so soon and expect that there will be a sequence of three rate hikes through 2011. That 50% probability was franked by an informal survey of 200 corporate and institutional customers who attended our annual Conference on September 9. Some 49% of respondents expect another rate hike in 2010; 46% expect the first move in the first half of 2011; and a lonely 5% expect that the next move will be down. Westpac have been comfortable arguing the “rate increase” case. Arguing that the timing will be later than market expectations is more difficult. Home owners keep your fingers crossed