An algorithm to track Australia's central bank

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

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 be turning hawkish.  

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