Traders slashed bets on an interest-rate cut in Australia next month to the lowest level in seven weeks after the central bank showed optimism the nation will weather Europe’s debt crisis and a slowdown in the U.S.
Australia, the world’s biggest iron ore and coal exporter, can’t escape fallout from economic stagnation in the U.S. and Europe and should be saving more for leaner times, UBS AG’s top banker in the nation said.
New Zealand retail spending unexpectedly stagnated in August and core sales fell, driving down the local dollar and strengthening the case for the central bank to pause interest-rate increases for the rest of the year.
Australia’s consumer prices probably rose at a slower pace in the third quarter, intensifying debate over whether the central bank should resume raising interest rates as wholesale costs climb and employment accelerates.
Australian employers added workers in May for a third straight month, underscoring the central bank’s assessment that economic growth will accelerate this year as a mining investment boom stokes hiring.