The Conference Board’s Australian Leading Index dropped -0.9% in December, the fourth consecutive month in negative territory. The index has fallen 2.3% from six months before. Major peaks or troughs in the index tend to precede key turning points in the economy. Indeed, the data is beginning to initial signs of topping out after trending higher since the last recession in 1990-91. A significant decline in the complimentary Coincident Index (whose major turning points tend to appear around the same time as in the overall economy) would confirm that the Leading metric is showing a true peak rather than a temporary correction. In any case, the markets see the central bank as well enough convinced of the perilous state of the economy to continue cutting interest rates: overnight index swaps see traders pricing in at least a 0.25% reduction when the Reserve Bank of Australia announces policy on March 3rd. The Australian Dollar is one of the few major currencies whose central bank has not yet completed the latest easing cycle, keeping a firm lid on any meaningful appreciation for the time being.