RBA

The Reserve Bank of Australia (RBA) Raises Interest Rates by 25 basis points to 5.75 per cent; Aussie dolar spikes: The Reserve Bank of Australia (RBA) raised the interest rates for Australia by 25 basis points to a 5 year high and the first . Lifting the benchmark official cash rate to 5.75 per cent from 5.5 per cent credit tightening in 14 months. The Aussie dollar spiked 50 pips on the announcement of the interest rate rise at 9.30am AEST, hitting US$0.7660 cents.

Is it time to bust? A time for market readjustment. I mean, its been a while since the last major crash... Anyway, the Reserve Bank of Australia (RBA) have accused the financial markets in their short sightedness in their factoring in risk and that a significant readjustment may be coming. We have had a long bull run - a long run of stable global growth and inflation. And this situation may have given investors a false sense of security given that global bond yields are well short of their long-term averages. The RBA recently released a quarterly financial stability review and in it they stated: "While the current environment of very low volatility may continue, experience suggests that when economic outcomes are consistently favourable over a run of years, investors tend to underestimate, and thus underprice, risk. It would therefore be surprising if there were not at least some element of this type of myopia in financial markets currently."