The immediate reaction in financial markets to the RBA’s decision to cut its cash rate 25bps to a record low 1.50% was far from a warm welcome. The share market fell, medium-to-longer term bond yields rose and the Australian dollar after briefly falling has risen against the US dollar overnight. To be fair, the RBA’s rate cut decision coincided with changing influences in global financial markets one important one being rising concern that global growth prospects might be softening partly evidenced by renewed weakness in the price of oil over the past couple of weeks. It also seems, however, that the rate cut marks the RBA’s recognition that Australian growth prospects are softening too, at least by implication in some of the wording in the statement accompanying the rate decision. More detail on the RBA’s views will be contained in the quarterly Monetary Policy Statement due on Friday.