Interest rate discussions will dominate again this year, this is one of my favourite charts for the moment

James Marlay

Livewire Markets

Interest rate discussions will dominate again this year, this is one of my favourite charts for the moment. Whilst the RBA Governor has held a steady line on rates the banks and strategists have mostly been shifting their expectations for cuts. Most investors I speak to say that the bond markets don't lie (although that doesn't mean they always get it right) which is why I enjoyed this chart from Don Williams at Platypus. Don says; Unfortunately, Canberra cannot be relied upon to boost the economy or confidence in the short term and therefore the RBA will have to act. Market indicators such as shape of the yield curve, which has flattened from a year ago, also suggest the need for easier monetary policy. Our view is that the improved housing market was primarily responsible for the RBA holding during 2014, and with the recent introduction of the 7% interest rate stress test for new borrowers we believe that housing is no longer a barrier to the RBA cutting rates. A good little read on rates here: (VIEW LINK)


James Marlay
Co Founder
Livewire Markets

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