15 Jul 2015
RBA: Next move in rates likely up - NAB
FXStreet (Bali) - Alan Oster, Group Chief Economist at NAB, suspects the next move in interest rates by the RBA is likely to be up, but not till late 2016.
Key Quotes
We have not changed our activity forecasts – 2014/15 2.4%, 2015/16 2.6% and 3.0% in 2016/17. The domestic economy is struggling to offset the impact of sharply lower mining investment. However near term data has continued to strengthen.
At this stage, it is difficult to assess the impact of recent international events in Greece and more importantly China. While international volatility creates risks to the downside of the forecasts, local data is pointing to upside risks.
Given its better starting point, we now expect a lower peak in unemployment of 6¼ - but remaining high for a considerable period. We still see the RBA holding rates steady, barring any downside surprises to our forecasts – the next move in rates is likely to be up, but not till late 2016.
Key Quotes
We have not changed our activity forecasts – 2014/15 2.4%, 2015/16 2.6% and 3.0% in 2016/17. The domestic economy is struggling to offset the impact of sharply lower mining investment. However near term data has continued to strengthen.
At this stage, it is difficult to assess the impact of recent international events in Greece and more importantly China. While international volatility creates risks to the downside of the forecasts, local data is pointing to upside risks.
Given its better starting point, we now expect a lower peak in unemployment of 6¼ - but remaining high for a considerable period. We still see the RBA holding rates steady, barring any downside surprises to our forecasts – the next move in rates is likely to be up, but not till late 2016.