Everybody is now forecasting imminent rate cuts: ANZ, NAB, WBC, MQG, CITI, CS, RBC, JPM, UBS, ME, TD, NOM, MB, bond and interest rate markets.
Not Bloxo at HSBC or his mates at The Shadow:
- as the RBA has pointed out repeatedly, while the jobs market still has positive momentum, which is still the case, the central bank could continue to argue that a tightening labour market will deliver a gradual lift in wages growth and an eventual return to having inflation on target.
- we remain of the view that the RBA will need to believe that the unemployment rate is set to rise to 5.5% (it is currently 5.0%) before it would consider cutting the cash rate, despite underlying inflation being low.
- we now expect the RBA to remain on hold at 1.50% until the end of 2020. As we have repeatedly noted, while the jobs market has positive momentum, we doubt the RBA will cut its cash rate.
I almost admire it.
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Update: I’ve been reminded that CBA and GS are still on the no cuts bandwagon.
