Australia’s economy is growing at a substantial rate, putting the market and exchange traded funds (ETFs) on an upward trend. In a few days, the central bank is expected to raise interest rates and this is because of the overall global environment. Tracy Withers for Bloomberg reports that the Reserve Bank of Australia should increase the overnight cash rate target a quarter point to 6.75 on November 7. Core consumer prices jumped during the third quarter and annual inflation exceeds the 3% upper limit of the target.
The country is also in the throes of another election, and increasing rates may not help Prime Minister John Howard’s chance of winning a fifth term in office. Howard’s Liberal-National coalition trails the opposition Labor party according to polls. The November 24 general election is just three weeks away.
Read the disclosure, as Tom Lydon is a board member of Rydex Investments.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.