6 Oct 2015
AUD: RBA comfortably on hold, unbothered by Fed – HSBC
FXStreet (Delhi) – Paul Bloxham, Chief Economist at HSBC, suggests that today's announcement by the RBA was unsurprising, with the cash rate left on hold at 2.00%. More importantly, the post-meeting statement was almost identical to last month's, implying that the RBA was just as comfortable with its policy setting as it was last time the board met.
Key Quotes
“If the RBA had been perturbed by the Federal Reserve's decision to hold steady on 17 September, or by the recent weaker indicators of Chinese growth, it certainly was not evident in today's commentary.”
“We suspect that the RBA remains comfortable because the labour market is continuing to improve (yesterday's strong job advertisements numbers for September being just the latest of many indicators supporting this view) and the AUD is now at a level where it is helping to support growth.”
“With the AUD doing the work for them, we expect that they will be highly reluctant to cut rates further, as even lower rates would bring risks (such as the possibility of over-inflating the housing market) as well as rewards.”
“What remains somewhat surprising is the high weight the market is putting on the possibility of a cash rate cut before the end of the year. Without a clear shock or significant downturn in the local numbers it is hard to think that the RBA would deliver another cut in the near term.”
Key Quotes
“If the RBA had been perturbed by the Federal Reserve's decision to hold steady on 17 September, or by the recent weaker indicators of Chinese growth, it certainly was not evident in today's commentary.”
“We suspect that the RBA remains comfortable because the labour market is continuing to improve (yesterday's strong job advertisements numbers for September being just the latest of many indicators supporting this view) and the AUD is now at a level where it is helping to support growth.”
“With the AUD doing the work for them, we expect that they will be highly reluctant to cut rates further, as even lower rates would bring risks (such as the possibility of over-inflating the housing market) as well as rewards.”
“What remains somewhat surprising is the high weight the market is putting on the possibility of a cash rate cut before the end of the year. Without a clear shock or significant downturn in the local numbers it is hard to think that the RBA would deliver another cut in the near term.”