"The Mercer Melbourne Institute Quarterly Bulletin of Economic Trends has gone against market forecasts of a likely interest rate hike in April or May and instead predicted rates to remain on hold.
This may explain the jump in bank stocks this afternoon.
For us bulls:
"Despite the slowdown in 2004 the Australian economy is forecast to remain relatively robust in the next two years, with GDP growth slowing to 2.1 per cent in year-average terms in fiscal year 2004/05 and recovering to 3.2 per cent in 2005/06."
The Melbourne Institute forecasts show that GDP growth in year-end terms will moderate to 2.0 per cent in the first half of 2005 before gradually returning to the long-term trend rate of around 3.5 per cent by late 2006.