22 Jan 2015
RBA to cut rates in March - ANZ
FXStreet (Bali) - Given the global deflationary pressure, according to ANZ Economists, the key question now is whether the RBA could cut in February or use the meeting as an opportunity to signal a rate cut in March, the latter being the core case by ANZ.
Key Quotes
"The news flow over the past 24 hours has all been one way: dovish. Markets are gunning for rate cuts with a bit more determination. In Australia, the case for interest rate cuts has been building over the last couple of months with many economists now picking a rate cut in either February or March."
"The CPI next week will be an important input into the RBA’s deliberations on 3 February. We expect the headline CPI rose 0.3% q/q and 1.8% y/y in Q4, with underlying inflation at 2.2% y/y. Low inflation outcomes will give the RBA scope to cut. Wages growth is low and petrol prices will subtract a further 0.6ppts from quarterly headline inflation in Q1 2015 if they hold at current levels."
"The key question now is whether the RBA could cut in February or use the meeting as an opportunity to signal a rate cut in March (which is what we currently expect)."
Key Quotes
"The news flow over the past 24 hours has all been one way: dovish. Markets are gunning for rate cuts with a bit more determination. In Australia, the case for interest rate cuts has been building over the last couple of months with many economists now picking a rate cut in either February or March."
"The CPI next week will be an important input into the RBA’s deliberations on 3 February. We expect the headline CPI rose 0.3% q/q and 1.8% y/y in Q4, with underlying inflation at 2.2% y/y. Low inflation outcomes will give the RBA scope to cut. Wages growth is low and petrol prices will subtract a further 0.6ppts from quarterly headline inflation in Q1 2015 if they hold at current levels."
"The key question now is whether the RBA could cut in February or use the meeting as an opportunity to signal a rate cut in March (which is what we currently expect)."