1 Mar 2016
AUD: RBA displaying its reluctance to cut - TDS
Research Team at TDS, notes that the RBA kept the cash rate at 2% as expected, displaying once again its reluctance to cut.
Key Quotes
“The accompanying statement was unchanged from the previous month, avoiding any mention of the downside move in risk assets and softer data (jobs and capex) and ignoring the increase in volatility. A rate cut, if any, appears unlikely in the near term. For now, the RBA is chilled. Our thoughts can be accessed here.
The building blocks that feed into tomorrow’s GDP were weak on balance: upside in government spending not enough to offset the softer net exports read (flat vs 0.3% pts f/c). After the softer Construction Work Done, company profits and inventories, we downgrade our GDP f/c from +0.4%/qtr to +0.2%/qtr.
Building approvals for Jan -7.5%; house prices +0.5%/mth and RBA commodity prices rose for the second consecutive month.”
Key Quotes
“The accompanying statement was unchanged from the previous month, avoiding any mention of the downside move in risk assets and softer data (jobs and capex) and ignoring the increase in volatility. A rate cut, if any, appears unlikely in the near term. For now, the RBA is chilled. Our thoughts can be accessed here.
The building blocks that feed into tomorrow’s GDP were weak on balance: upside in government spending not enough to offset the softer net exports read (flat vs 0.3% pts f/c). After the softer Construction Work Done, company profits and inventories, we downgrade our GDP f/c from +0.4%/qtr to +0.2%/qtr.
Building approvals for Jan -7.5%; house prices +0.5%/mth and RBA commodity prices rose for the second consecutive month.”