Pressure on the RBA for a rate-cut builds as iron ore price falls

Via Bloomberg, this:

• Traders see 64 percent odds Governor Glenn Stevens will cut the overnight cash rate target by a quarter percentage point within 12 months
• Highest chance since September 2013

Bloomberg citing OIS market data

More:

• RBA “faces pressure to resume interest-rate cuts as the economy suffers for its dependence on iron ore” (accounts for more than $1 out of every $5 of export income)
• “The risks for the Australian economy are tilting to the downside” Guy Bruten, an economist at AllianceBernstein
• “There’s a growing prospect that the RBA may well need to cut” as analysts are underestimating a collapse in commodity prices that is likely to be “deeper and broader” than expected”

The article is ungated.

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Reminder – tomorrow is the Reserve Bank of Australia (RBA) monetary policy board meeting. the announcement is scheduled at 0330GMT (2.30pm local time). I’ll have a preview up tomorrow in the morning ahead of it (spoiler alert – don’t expect any policy action from the RBA tomorrow … but it will be interesting to see if they start to lean a little more dovish in the accompanying statement.)