Punters can more than ‘Dare to Dream’ about a Melbourne Cup Day cash rate cut: Bloomberg

Giddy-up punters, short odds are now on a Melbourne Cup Day rate cut on November 6, according to both economists polled by Bloomberg and interest rate futures markets.

The latest Bloomberg poll shows that 21 out of 26 economists polled expect the RBA to cut the cash rate in November.

In addition, swaps traders are pricing in an 80% chance of a cut on November 6.

They’re certainly a lot better odds than Dare to Dream, the three-year-old filly priced at 61 to 1. Mount Athos is the favourite at 8 to 1.

Last year French horse Dunaden won by a nostril from Red Cadeaux. Punters might also remember that the RBA cut the cash rate by 25 basis points to 4.5% on Melbourne Cup Day last yer, the first rate cut since April 2009, when the cash rate fell to 3%.

A rate cut on Melbourne Cup Day this year would bring the cash rate to that historic low, and who knows, perhaps Glenn Stevens, who has been under scrutiny on several fronts, might pick the winning horse as well.

Of the five economists not tipping a rate cut in November – three are well-known foreign-based institutions – Moody’s, JP Morgan and Goldman Sachs and another is also a global entity, Capital Economics, a macro-economic research firm.

The only Australian institution tipping rates to remain on hold is Ausbil Dexia, a boutique fund manager.