Furthermore, by 2004 the cash rate is expected to be closes to 5.25 per cent. Bond yields also backed up on the better than expected growth numbers and the chance that the local economy will improve on stronger construction activity and the confidence of consumers and business after upbeat profit reporting season. However yields will go lower from here as US economic growth will not be that sensational going into the end of the year (The Australian Financial Review, 03/09/2003).
Finally, many analyst and money managers have different perspective against what's going to happen to interest rate in the future. They are similar to RBA doing monitoring in the international economy and the local housing market. These two key variables play an important role over the next few months in determining the interest rate moving up or down.
5. Conclusion
In conclusion, moving rates can affect the financial instruments such as equity, government securities, corporate bonds and bank term loans in the capital market. It also has great influence on the financial institutions such as banks and foreign exchange market. Investors and shareholders will be inevitably under the influence of interest rat as well. Most importantly, the pattern of interest rate change seems to be irregular by it's natural dependence on several important factors such as global economy, oil price, currency, net export, inflation, consumer credit and wealth growth.
…
