Markets now expecting a February cut
Well, here come the interest rate cut expectations we were talking about only earlier.
It has been an amazing shift in cash rate futures in just 24 hours.
To a fair extent it seems that this change in view may have been driven by Terry McCrann's article.
Note how the February 2015 contract is now trading at just 97.65, implying a yield of just 2.35.
That suggests a market expectation of a 2-in-3 chance of a cut on February 3 - or significantly more likely than not.
Also note how the chance of a cut by March is priced in at more than 100 percent.
Meanwhile the yield on contracts out until the middle of 2016 is only 1.9 percent!
Lower interest rates here we come.