23 Oct 2013
RBA unlikely to cut – Rabobank
FXstreet.com (London) - Jane Foley, Senior Currency Strategist at Rabobank noted that overnight brought news of a stronger than expected rise in Australian CPI (0.7% q/q).
Key Quotes:
“This data release has strengthened our belief that the RBA are unlikely to cut rates again this cycle but this view was formed because of signs of pick up in other parts of the Australian economy, including the housing market”.
“While the RBA, like most G10 central banks, is mandated to keep CPI in check, the Bank in recent years has been forced to keep one eye on house prices and the associated outlook for household debt”.
“High levels of household debt means that the economy is more vulnerable to a hard landing when recessionary risks arise”.
“While the end of the mining investment boom in Australian impacted household’s desire to take on more debt, house prices have recently been again showing signs of life and this is likely to be a key factor in staying the hand of the RBA going forward”.
Key Quotes:
“This data release has strengthened our belief that the RBA are unlikely to cut rates again this cycle but this view was formed because of signs of pick up in other parts of the Australian economy, including the housing market”.
“While the RBA, like most G10 central banks, is mandated to keep CPI in check, the Bank in recent years has been forced to keep one eye on house prices and the associated outlook for household debt”.
“High levels of household debt means that the economy is more vulnerable to a hard landing when recessionary risks arise”.
“While the end of the mining investment boom in Australian impacted household’s desire to take on more debt, house prices have recently been again showing signs of life and this is likely to be a key factor in staying the hand of the RBA going forward”.