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An algorithm to track Australia's central bank

First, an algorithm identifies key words and sentences from each rate statement

Chris Bourke | Bloomberg 

The latest index for Australian market watchers doesn’t track stocks, bonds or currencies. It uses an algorithm to track the tone of central bank Governor Philip Lowe’s words. Australia & New Zealand Banking Group has finely crunched the prose of the Reserve Bank of Australia’s two governors over the past decade to see if their rate statements signal a clear bias. The results correlate positively with rate moves and show that the central bank — which hasn’t provided any forward guidance since it last cut interest rates a year ago — may finally ...

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First Published: Tue, August 29 2017. 01:48 IST
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