15 Oct 2013
Flash: Two further rate cuts by the RBA still required - Westpac
FXstreet.com (Barcelona) - Westpac Economists think two further rate cuts are still required by the RBA after today's minutes.
Key Quotes
"We had expected that the easing bias stance was going to be retained mainly because the major positive development for the economy since the September meeting has been the sharp boost to business confidence. However in his statement on October 1 the Governor questioned the sustainability of that boost."
"The commentary around the consumer; business investment; and the labour market remains downbeat in these minutes while recent data around dwelling approvals and housing finance hardly point towards a runaway housing boom."
"On October 3 we revised back our timing for the next rate cut from November to February. Our more downbeat view of the world economy along with our concerns for the labour market and the feedback effects to incomes, consumption and business investment still point to the need for lower rates particularly given the recent appreciation of the AUD."
"However we argued that the Bank could not ignore recent strength in business and consumer confidence as well as the upswing in house prices. In leaving their options open for further cuts the Bank is well positioned to assess the interaction between these factors over the next three months."
"It is our view that this interaction will make it clear that two further rate cuts are still required."
Key Quotes
"We had expected that the easing bias stance was going to be retained mainly because the major positive development for the economy since the September meeting has been the sharp boost to business confidence. However in his statement on October 1 the Governor questioned the sustainability of that boost."
"The commentary around the consumer; business investment; and the labour market remains downbeat in these minutes while recent data around dwelling approvals and housing finance hardly point towards a runaway housing boom."
"On October 3 we revised back our timing for the next rate cut from November to February. Our more downbeat view of the world economy along with our concerns for the labour market and the feedback effects to incomes, consumption and business investment still point to the need for lower rates particularly given the recent appreciation of the AUD."
"However we argued that the Bank could not ignore recent strength in business and consumer confidence as well as the upswing in house prices. In leaving their options open for further cuts the Bank is well positioned to assess the interaction between these factors over the next three months."
"It is our view that this interaction will make it clear that two further rate cuts are still required."