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RBA Preview: Weak Inflation Provides Catalyst to Cut
Worryingly weak inflation figures have heightened chances that the RBA cuts interest rates on Tuesday, a move the central bank was hoping to save in case demand decelerated and the recent strength in the labor market ebbed. From very little expectation a week ago that the Reserve Bank of Australia (RBA) would cut interest rates in May, markets are now pricing in more than a 50% chance of a 25 basis point cut to the cash rate on Tuesday. The RBA has kept the cash rate steady at 2.0% for a year now, as labor demand continued to outpace the bank's forecasts and the weaker exchange rate supported the service sector, ... (full story)