Now the Reserve Bank has hinted it will cut interest rates next month, soaring in the month ahead, as the mining boom slows quicker than expected.

 

Mr Stevens says the gloom over Europe's debt crisis is starting to ease, but he says productivity must be boosted to combat the forecast resources slowdown.

 

“The latest inflation data, while not in themselves, a major problem were higher than expected. And the gloom in the global economy has lifted, a bit at least for the moment. The peak is probably going to be a bit lower now than we thought six or nine months ago. Now, well, that's in view of the fact that prices have come down for commodities and they've been more variable. And boards of directors of resource companies, not to mention their leaders, have become more conservative.”

 

Glenn Stevens is speaking in Melbourne last night.

 

Let's go to the markets.

 

The Dow has dropped 26 points. The Nasdaq fell seven. The S&P 500 is down slightly. And across in London, the FTSE closed 10 points weaker. 

 

To commodity markets.

 

West Texas Crude is trading at 86 US dollars a barrel. Tapis Crude is 115 US dollars a barrel. And gold is 1727 US dollars an ounce.

 

The Aussie dollar is buying 104 US cents, 81 Euro cents and 65 pence sterling.