Analysts at Citigroup offer their outlook on the Reserve Bank of Australia’s (RBA) next policy move, with a rate cut mostly likely seen in August.
“NAB business confidence in April is flat and the lowest reading in over 4 years though some of the weakness may be related to pre-election uncertainty (Federal election is held this Saturday).
Most importantly though for the RBA, employment conditions are negative for the first time since August 2015.
The last time business confidence was at this level, the RBA cut the cash rate by 25bps.
This data on its own is unlikely to promote policy action.
RBA will want to see what happens to the unemployment rate.
There is the prospect of post-election fiscal stimulus worth around ¾pp of GDP.
Expect the RBA to cut in August, 25bps.”
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.