RBA member Harper: Economic growth was too weak to justify a rate hike - TDS
Analysts at TDS point out that the main message the market grabbed hold of from RBA Board member Ian Harper’s Bloomberg phone interview today was that economic growth was too weak to justify a rate hike.
Key Quotes
“To quote: “As well as we're doing, the Australian economy is still operating below its potential. So long as that is the case, why would anyone be suggesting tightening monetary policy when the economy is operating below potential? I mean hello?" Other remarks revealed 1) the RBA is content with current property curbs and 2) there was little the RBA could do on the AUD, given currency gains are being driven by a weaker USD. The remarks prompted a 20 pip drop in the AUD (but held above US$0.80), but that was quickly reversed within the hour while 10yr ACGB yields were 0.5bps lower.”
“Consumer Confidence for August rose for the 1st time in 5 months, +2.5% from 95.5 to 97.9, but it remains below its long term average. Family Finances-year ahead was the only sub component to register a fall for the month. On Housing, the consensus was that house prices were still high, yet the majority (57%) expect prices to rise further over the coming year.”