RBA Assistant Governor: Rate cuts have taken account of the expected evolution of the housing cycle


Guy Debelle, Assistant Governor (Financial Markets) at the Reserve Bank of Australia  is speaking on “Housing and the Economy” in Sydney and has said  a sizeable downturn in home building is underway.

Additional comments:

Says home construction turned down sooner, by more than we expected.
Says much of the downturn in construction activity is still ahead.
Downturn will directly subtract around 1% point from gdp growth from peak to trough.
Says effect of downturn will be somewhat larger on the economy as a whole.
Says downturn dragged on small business incomes, household wealth.
Together accounted for much of the slowdown in consumption growth.
2020 looks like being the low year for residential construction sector.
"we can see through the trough to the other side" of the downturn.
Home prices have turned in melbourne and sydney, investors returning to market.
Rate cuts have taken account of the expected evolution of the housing cycle.
Says likely to see more muted pick-up in home lending than in the past.

About Debelle

Guy Debelle is the Assistant Governor (Financial Markets) at the Reserve Bank of Australia, a position he has held since March 2007. In that role, he has oversight of the Bank's operations in the domestic and global financial markets, including the management of Australia's foreign reserves. He briefs the Reserve Bank Board on developments in financial markets at the monthly Board meetings and participates as the Bank's representative in a number of global fora, including the BIS Committee on Global Financial Stability.

FX implications

AUD/USD has been taken for a ride of late due to US/China trade war headlines as well as sentiment surrounding the RBA and their next move. 

"Markets are pricing 10bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.44% (RBA cash rate currently at 0.75%)," analysts at Westpac explained

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.

EUR/USD News

GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 

GBP/USD News

Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures