Australia’s Private Sector Credit unexpectedly shrank for the first time in nine months September, dropping -0.2%. In annual terms, lending grew 1.7%, the slowest in 16 years. Details of the report proved ominous: business lending fell -1.3%, the most since December, hinting at hiring and output in the months ahead. The situation will be all the more difficult considering the Reserve Bank of Australia (RBA) is poised to continue raising benchmark interest rates after becoming the first central bank in the G20 to do so this month in the aftermath of last year’s global financial crisis and credit crunch. The markets still bet that the RBA will raise rates by 25 basis points next week but traders’ conviction is on the wane, with a Credit Suisse gauge of priced-in rate hike expectations down 28.2% over the past two weeks.
For streaming currency market news and analysis, please visit http://forexstream.dailyfx.com
To reach Ilya regarding this article or subscribe to his email distribution list, please contact him at ispivak@dailyfx.com
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.