Unemployment rate jump + inflation expectations down: no hikes in sight, for now

So the see-saw interest rate game continues. With the unemployment rate rising from 4.9% to 5.1% today and Westpac-Melbourne Institute inflation expectations declining, a lot of pressure will have been relieved from the RBA vis-a-vis hikes. The Aussie dollar has also declined by 9% at its current price of 1.015 from the high of over 1.10. Taking the average daily AUD/USD cross since the end of March, the Aussie dollar is down 5%. According to the RBA's research, this is akin to almost a full rate cut, all other things being equal.The yield curve will continue to invert, which means we should see lower fixed-rate home loans offered by the banks, albeit with the cost of lower term deposit rates for those net savers out there. Some fixed-rate loans are down by as much as two rate cuts, or 0.60 percentage points.  Many will argue that official RBA rates should be going down, while the more sensible heads will probably conclude that the RBA can wait until the next inflation print in late October. Great news for all borrowers and the housing market especially, which is the most interest rate sensitive sector of the economy.