Paul Boxham is out with a note this morning changing his hawkish rate call by pushing out his fist hike by one quarter:
Inflation is low enough for the RBA to consider a rate cut: but demand is lifting, albeit modestly, so we expect them to hold
- Low rates are already gaining traction, supporting a rise in retail sales and housing prices, although building approvals and consumer sentiment have eased back a bit
- We have changed our medium-term view: given lower Chinese growth, continued AUD strength and low local inflation, we now don’t expect a rate rise until early 2014
A word of advice. When you’re wrong, it’s much better to say so, take the pain, and move on. Death by a thousand cuts only prolongs the damage. Bloxo’s new forecasts are:
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130503 the RBA Observer – A Close Call, But We Still Expect Them to Hold