The Reserve Bank of Australia cut 100 basis points last night taking the cash rate to 4.25% – well into easing territory.
A feeling that global commodity prices were in for a sustained lower period was a driving force behind this stimulus. Surprisingly the Reserve Bank of Australia did not mention to enormous decline in fuel prices – however, there suggestion that the terms of trade would fall markedly implicitly suggests that the decline in petrol prices will be dominated by other factors.
What does this mean for New Zealand – a rule of thumb stemming from cuts so far (Aussie cut + 25) would suggest 125bp. 100 is still conceivable, as is 150. My pick of 75 now seems incredibly unlikely. Note, further discussion of the decision occurs in the comments of this post 
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And the Reserve Bank cuts … « The visible hand in economics says:
December 4, 2008 at 9:17 am (UTC 12 )
[...] for me so the Bank is yet to announce it. We have discussed this wildly though (here, here, and here) – so it will be good to see what has [...]
Australia Funding Costs Rise; U.S. Jobs Spurs Recession Concern | ForexZillion.com says:
January 8, 2009 at 1:36 pm (UTC 12 )
[...] RBA cuts 100 | TVHE [...]