The Reserve Bank of Australia decided to leave its benchmark interest rates unexpectedly steady at 3.25 percent opposing median estimates of another 25 basis points cut, the RBA explained that the aggressive easing policy so far in addition to governmental spending are good enough to help revive economic growth in Australia.
A report tomorrow is expected to show that the Australian economy grew by 0.2 percent only during the last three months of 2008, as increased spending on the back of governmental support for households helped them withstand worsening economic conditions.
The pause could send a message that the RBA will not cut its interest rates anymore, especially as the government assured that it stands ready to provide more help in order to be able to help revive economic growth amid the worst financial crisis since the Great Depression.
Moving to Europe, as Switzerland released today their fourth quarter Gross Domestic Product (GDP), the economy contracted by 0.3 percent following a revised contraction of 0.1 percent yet GDP was well above median estimates of a 0.8% contraction, while the economy contracted by an annualized rate of 0.6 percent down from the prior rise of 1.4 percent, and well below median estimates of -0.1 percent.
The Switzerland economy continues to contract inline with other economies around the globe, as the worst financial crisis since early 1930s continues to hammer economic growth all around the globe, and continues to lead major economies deeper into recession.
As for Europe's second largest economy, the U.K. economy remains under huge pressures as slowing economic activity continues to weigh down on economic growth and continues to send the U.K. economy deeper into recession, where sectors are falling apart one after the other.
The construction purchasing managers index will be released today for the month of February, analysts predict the construction sector to continue contracting as economic conditions continue to worsen, and the index is expected to drop to 34.2 from the prior estimate of 34.5 reported back in January.
Moving on across the Ocean, the Bank of Canada will announce today their decision on benchmark interest rates, the BOC is expected to cut its interest rates by another 50 basis points to 0.50 percent from the current 1.00 percent.
The Canadian economy was also hampered by the ongoing financial crisis, as it hit Canada's financial sector directly and since it's very connected and interrelated with the U.S. financial sector, while slowing demand all around the globe and especially from the United States weighed down heavily on economic activity and led the Canadian economy into the depth of recession.
Finally, the U.S. will release today their pending home sales for the month of January, sales are expected to decline by 3.5 percent after rising 6.3 percent back in December, the housing sector continues to deteriorate deeply in the United States, as tightened credit conditions, rising foreclosures and falling home values continue to suppress the sector.
The figures released so far from the housing sector during January suggests that the housing sector is nowhere near its bottom and that the sector will continue to weigh down on economic growth inline with other sectors including the manufacturing and the service sectors...