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Australian Business Confidence Sinks to Lowest in 11 Years
Tuesday, 11 November 2008 02:39:18 GMT  |  Ilya Spivak, Currency Analyst
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Australian Business Confidence fell to the lowest level in at least 11 years and the worst on record according to National Australia Bank, printing at -29 in October versus -8 in the preceding month. Aggressive interest rate cuts from the Reserve Bank of Australia failed to stem the slide in sentiment even as Governor Glenn Stevens slashed borrowing costs by a full percentage point in October. There is indeed little reason for a rosy outlook as global demand evaporates while business credit remains elusive. Interestingly, the response from forex markets was fairly muted as AUDUSD moved just 35 pips lower on the announcement, remaining firmly in the range established in the second half of the New York trading day. It seems traders are already pricing in the worst-case scenario for the Australian economy, with overnight index swaps pointing to 75-100 basis point cut when the RBA meets again on December 2nd.

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