Analysts at NAB suggest that they have changed their view on the RBA’s cash rate, and has brought forward the timing of forecast rate cuts to start in June. 

Key Quotes

“We now expect the RBA to cut at the 4 June Board meeting and again in August. We also see a risk that the RBA delivers additional policy stimulus by early 2020, either by cutting again or opting for an alternative policy measure.”

“Yesterday’s labour force data provided further evidence that the economy is weaker than the RBA had expected.”

“With underlying inflation almost back at the multi-decade low reached in 2016, the RBA said in its May cash rate decision that “a further improvement in the labour market was likely to be needed for inflation to be consistent with the target”, where the Board would be “paying close attention to developments in the labour market at its upcoming meetings”. Given low inflation, continued weakness in the NAB business survey – where NAB’s internal indicators point to the weakness in spending becoming entrenched – and now higher unemployment, we think the Board will now act in June and that this is likely to be signalled in the May Board minutes and Governor Lowe’s speech on Tuesday.”

“The timing of a follow-up cut will depend on the flow of the data, but we have now brought forward the second cut to August, taking the cash rate to 1%.”

“We have previously noted that further policy adjustment may be required and we highlight the risk the RBA will deliver additional policy stimulus by early 2020. This could be in the form of a further rate cut, taking the cash rate below 1%, or consideration of an alternative policy measure to support the economy.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Stable amid trade calm and German stimulus hopes

EUR/USD is trading around 1.1100, marginally higher. President Trump expressed optimism about reaching a trade deal with China while Germany's Scholz opened the door to stimulus. EZ Core CPI is confirmed at 0.9%.

EUR/USD News

GBP/USD steady below 1.2150 after Yellowhammer leak, as Corbyn calls for no'confidence

GBP/USD is trading below 1.2150 amid reports of food shortages in case of a hard Brexit, project Yellowhammer. Opposition leader Corbyn calls for a no-confidence motion against the government 

GBP/USD News

USD/JPY bounces off 106.25, focus on Fed minutes, Jackson Hole

USD/JPY bounces off the key support at 106.25 and heads back towards the 106.50 level, in response to downbeat Japanese trade data, risk-on action in the Asian equities and higher Treasury yields.

USD/JPY News

Gold: Drops to multi-day lows, back below $1500 handle

Meanwhile, technical indicators have been gaining negative traction on hourly charts and support prospects for an extension of the corrective slide back towards testing last week's swing lows.

Gold News

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Bullish levels to watch after Binance announces Venus vs. Facebook's Libra

Cryptocurrencies have been advancing once again, with Bitcoin topping $10,500, Ethereum clawing its way back above $200, and Ripple extending its gains.

Read more

MAJORS

Cryptocurrencies

Signatures


  •  
  •  
  •  
  •  
  •