All eyes are on the Reserve Bank of Australia's (RBA) minutes of its April 3 board meeting.
According to The Age, the RBA acknowledged growth for the global economy was expected to be at a below trend pace in 2012 because of ongoing economic weakness in Europe and a slowing of growth in China.
It seems more than ever that the RBA is now waiting for the consumer price index (CPI) data due on April 24 to determine its decision in May.
The sharemarket didn't like the look of a slowing global economy, sending the All Ordinaries (INDEX: ^AORD) and S&P/ASX 200 (INDEX:^AXJO) sharply into reverse.
See if you can spot the inflection point. Thanks for nothing, RBA. Not surprisingly, the Aussie dollar also sank.
Source: Yahoo!7 Finance
According to Bloomberg, traders are pricing in a 91 per cent chance the RBA will reduce borrowing costs by a quarter percentage point to 4 per cent at the next policy meeting on May 1.
It sounds like a done deal. But we've been here before, in February, when a rate cut seemed a living certainty. Regular Motley Fool readers will know how that one ended.
Could the RBA surprise us again? A half percentage point cut on May day? I wouldn't count it out.
With interest rates potentially about to fall, dividend paying stocks may come back into vogue.
If you're looking for income from your shares, look no further than "Secure Your Future with 3 Rock-Solid Dividend Stocks". In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.
- 10 stocks better than a lottery ticket
- The grass-roots way to multi-bagger returns
- Don't let the ASX take your rights!
Bruce Jackson has an interest in National Australia Bank. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available.