RBA Deputy Governor Michele Bullock acknowledged in a speech that some commentators contracted the 24bps hike in October with those of other central banks that have been hiking by larger increments.
“In part, this reflects our particular economic circumstances,” she said. “But it is also relevant that the Board meets more frequently than most of our peer central banks.”
RBA is “making monetary policy decisions 11 times a year so it is discussing regularly the evidence on the economy and has more flexibility on the size and timing of rate increases… The incremental change in the policy rate at recent meetings has been smaller than some other major central banks. However, our policy rate trajectory has been as steep, or steeper, than other central banks”.
Both Fed and ECB hold monetary policy meetings 8 times a year.
German ZEW situation tumbled sharply, significantly worse
Germany ZEW Economic Sentiment rose slightly from -61.9 to -59.2 in October, above expectation of -66.0. Current Situation Index dropped sharply from -60.5 to -72.2, below expectation of -69.0.
Eurozone ZEW Economic Sentiment improved slightly from -60.7 to -59.7, above expectation of -60.6. Current situation dropped very sharply by -11.7 pts to -70.6. Inflation expectations for Eurozone declined from -23.7 to -35.8.
“The ZEW Indicator of Economic Sentiment rises slightly in October. However, the current economic situation is once again assessed as significantly worse than in the previous month. The probability that real gross domestic product will decline in the course of the next six months has also increased considerably. Overall, the economic outlook has deteriorated again,” said ZEW President Professor Achim Wambach on current expectations.
Full release here.