Stephen Koukoulas Reserve Quotations

The unemployment rate is likely to break below 5 percent in the months ahead. It will escalate the pressure on the Reserve Bank to raise interest rates, which in turn will be a shot in the arm for the Australian dollar.

The credit data, together with the TD-MI monthly inflation gauge for October suggest the Reserve Bank will leave interest rates unchanged,

A big increase could certainly get the Reserve Bank a little nervous. They'd be very close to pulling the trigger, raising the rate.

We forecast the Reserve Bank will raise rates by the middle of the year as it works to damp inflation pressures that are still pronounced.

Housing construction is likely to be weak into the first half of 2006 and possibly beyond. It works against the tightening bias of the Reserve Bank.