4 May 2015
RBA decision a close call - RBS
FXStreet (Bali) - This week’s RBA decision is a very close call, notes Brian Daingerfield, FX Trading Strategist at Royal Bank of Scotland.
Key Quotes
"The RBA has suggested repeatedly that “further easing of policy may be appropriate over the period ahead”, which is a surprisingly blunt assessment from the central bank and suggests easing is likely in the coming months."
"Still, in an April 21st speech, Governor Stevens expressed a lessened enthusiasm about the value of additional rate cuts given the already high level of leverage in the economy."
"That, paired with inflation holding essentially steady in 1Q 2015 (and in line with the RBA’s last forecast round), stronger than expected employment data in March, and a small pickup in iron ore prices makes this week’s RBA decision a close call."
"The recent data may support a wait-and-see stance to assess the housing market in light of December macro prudential measures, but the decision accompanies a forecast update in the new Statement on Monetary Policy, a 25bp cut at this meeting is certainly not out of the question. The Australia data calendar also includes April employment data."
Key Quotes
"The RBA has suggested repeatedly that “further easing of policy may be appropriate over the period ahead”, which is a surprisingly blunt assessment from the central bank and suggests easing is likely in the coming months."
"Still, in an April 21st speech, Governor Stevens expressed a lessened enthusiasm about the value of additional rate cuts given the already high level of leverage in the economy."
"That, paired with inflation holding essentially steady in 1Q 2015 (and in line with the RBA’s last forecast round), stronger than expected employment data in March, and a small pickup in iron ore prices makes this week’s RBA decision a close call."
"The recent data may support a wait-and-see stance to assess the housing market in light of December macro prudential measures, but the decision accompanies a forecast update in the new Statement on Monetary Policy, a 25bp cut at this meeting is certainly not out of the question. The Australia data calendar also includes April employment data."