Charts Of The Day: Australian Rates, Chinese PMI

While we had not been pencilling in another rate hike this year, the Reserve Bank Of Australia (RBA)'s decision to raise its policy rate by 25bps for a third consecutive month to 3.75% was not wholly unexpected. Indeed, we stated on November 30 that the risks were skewed to the upside given recent hawkish rhetoric by RBA Governor Glenn Stevens. From a fundamental standpoint, we continue to believe that Australia's monetary authorities may be tightening policy for the wrong reasons. Higher interest rates can, of course, be justified in light of growing bubble risks (house prices have smashed through 2008's

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