RBA Rate Decision

The odds are certainly stacking up for a tightening today. Sportsbet were offering $2.90 but it's now in to $1.35 for a hike from a $1 bet!

The reason for the big move is that releases yesterday show both commodity and housing prices are booming.

Commodity prices recorded their biggest-ever monthly jump, climbing 17.6 per cent in April. The RBA says the jump only ''partially'' reflects the new higher prices being negotiated for iron ore and coal with the latest deals pushing up the price of iron ore ''around 100 per cent'' and coking coal ''55 to 100 per cent''.

A 20% jump in housing prices is also well reported in the press this morning and given the Governor highlighted his worries about housing in his TV appearance in March one expects this to figure prominently in their discussions this morning. This ABS figure is however not too reliable and is often subject to revisions. John Edwards of Residex also points out that if you drill down into the figures there are some lower socio-economic suburbs where house prices are dropping as people begin to reel from the impact of successive tightenings. For this reason if they do tighten there's a good chance they will pause next month.