New Zealand Expects to Follow Australia and Cut Interest Rates

Reserve Bank of Australia Governor Glenn Stevens concurs with experts that the RBA faces a ‘difficult job’ to balance its economy to make sure it doesn’t undershoot its inflation target. Stevens, who is in the lame duck period of his tenure and set to retire in September, stated that the benchmark range for Australian inflation for the last decade is now outdated. For about the last ten years, the inflation target was at 2.00-3.00% while maintaining an unemployment range between 5.00-6.00%. As deflation looms over the Australian economy, the RBA forecasted inflation will remain below its target until the end of 2018. Stevens stated right after the interest rate decision that ‘inflation returning to target over time, would be improved by easing monetary policy’ meaning that another rate cut in the future is not out of the realm of possibility.

Natural gas prices dropped by more than -5.00% as mild temperatures have been forcast across the US for the next two weeks. In 2015, about 27.00% of US electricity was generated with natural gas and a majority of US natural gas supply is domestically produced. Summer temperatures usually sees a notable increase in demand for natural gas as air conditioning use goes up, requiring more power from utilities. The Energy Information Administration will release its natural gas storage report tomorrow after they reported a contraction of-6 billion cubic feet last week.