The Reserve Bank has hinted at the possibility of more rate cuts ahead in the minutes of its latest policy meeting.
In the minutes, the board said its decision at the October meeting had pushed interest rates to lower than average levels.
“The effects of the earlier reductions in the cash rate were, meanwhile, continuing to work their way through the economy, and members expected that further effects of these changes were yet to be observed,” the minutes said.
“Members considered that further easing may be appropriate in the period ahead.
The RBA kept rates on hold in November. Economists had expected movement, but have now shifted their expectations to either December or early 2013.
Consumer spending down in October
The latest Commonwealth Bank business sales indicator has found consumer spending dropped 1.2% seasonally adjusted in October.
CBA local business banking executive general manager Adam Bennett said in a statement the trend series over the past five months has resulted in a flat result, but said spending was up 6.2% compared to a year ago.
CommSec economist Craig James said the result was subdued.
“Aussie consumers are still spending, but very selectively, as evidenced in mixed spending results across sectors,” he said.
Shares up after strong offshore lead
The Australian sharemarket has opened higher this morning following a positive lead from the United States, where hopes of a budget agreement have surfaced.
The benchmark S&P/ASX200 index was up 12.3 points or 0.3% to 4373.7 at 12.00 AEST, while in the United States the Dow Jones Industrial Average rose 207 points or 1.6% to 12,796.
Shares in Blackwood tumble 25%
Shares in Blackwood Corporation have tumbled 25% after Nathan Tinkler’s Mulsanne Resources was placed in liquidation after failing to resolve a $28.4 million bill with the company.
In a statement, Blackwood said directors’ powers had been suspended.
“The liquidators will undertake investigations into Mulsanne Resources and the company’s affairs and will seek to collect and recover property and assets of Mulsanne Resources to apply to meet the claims of the creditors,” Blackwood said.