RBA Gov Stevens: Talk of end of mining boom ‘somewhat overhyped’

  • Next phase of mining boom has begun in the case of iron ore, but still some way to go for Gas
  • Terms of trade have peaked, will probably fall by around 15% next year
  • Chinese slowdown more material than expected a year ago, but not ‘disastrously so’
  • Expect domestic consumption to grow in line with income
  • Surprised AUD still so high given that ‘Terms of Trade’ peaked a year ago
  • Pre conditions for a pick up in housing construction coming into place
  • Board feels further easing may be necessary  over time
  • Latest inflation readings are a bit  high, but not a major problem
  • Encouraging pick up in productivity, but too early to conclude a new trend
  • World will have to live with Eurozone anxiety for several years

AUD’s fairly static around 1.0408 after the mildly upbeat comments

One Comment

  1. RBA´s Stevens is one of the same kind. He is still watching “productivity growth” – parameters that have not any meaning whatsoever in deflationary times. He is surprised that AUD is still so high? Did this guy ever heard of interest rate differentials and meanwhile he should have “heard” that AUD is some sort of “reserve currency”. Yada, yada, yada.

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