BoAML: RBA to cut in August and September

We warned BofAML in January that it was wrong:

We continue to expect the RBA to remain on hold this year but concede the case for hikes in 2020 has weakened.

…The change in dynamics is more centered on the outlook for global growth, in our view, rather than a step change in the risks around the domestic housing slowdown.

…A necessary condition for a change would be a change in robust labor market dynamics.

Over 250,000 jobs were created between January to November, of which more than 60% were full-time, down from the record of 410,00 in 2017 but double seen over 2016.

While we concede the labor market lags the economy, the leading indicators of labor demand remain positive.

No, are do not:

Today BofAML capitulated, shifting to two cuts in August and September. They are right about one thing. The RBA never stops at one.

Comments

    • Lbs
      RBA I think will have to cut 50 bp in one hit
      They cut 100 bp in 08 and then 75bp next I think

      • proofreadersMEMBER

        Nah, probably just a plain, vanilla screw job from the RBA “prayer group” to warm up?

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