Australian interest rate investors tend to keep an eye on future moves in the cash rate cycle and what the Reserve Bank of Australia is likely to do next. This can help investors decide whether or not they are going to lock their money away in a term deposit for 30 days or five years or somewhere in between. If investors think that rates will rise in the near term, they will not want to lock their money away in long term TDs and are more likely to opt for short term TDs and other highly liquid instruments.
The market itself has no more knowledge about what the RBA will do next than the next person, but the market is sensitive to changes in macroeconomic indicators like CPI, unemployment, business confidence and the balance of payments as well as external influences such as what the Federal Reserve is doing in the US.
One of the easiest ways of by checking out what the market is predicting for the future of rates is to check out the RBA Rate Indicator. The RBA Rate Indicator shows market expectations of a change in the official cash rate and calculates a percentage probability of an RBA interest rate change based on the market determined prices in the ASX 30 Day Interbank Cash Rate Futures. As such, the RBA Rate Indicator provides market participants with a market monitor for official cash rate expectations in Australia. The RBA Rate indicator can be accessed at any time here.