RBA rate cut? JP Morgan expect so in May and June, not earlier

JP Morgan’s latest on what to expect from the Reserve Bank of Australia – comments from chief economist Stephen Walters:

• Expect cuts in May and June (but there is a “non-trivial” risk of a cut next week, i.e. February 3)
• Says the RBA doesn’t have enough evidence to cut earlier than May
• Say the RBA will want to wait to see the impact of the oil price falls, how consumer spending responds
• “Rather than make a surprise move, it makes sense to us for officials first to send a dovish signal in next week’s statements to prepare the ground and help cement AUD weakness.
• Our new base case, then, is that the RBA will use next week’s policy announcement and subsequent release of new lower inflation forecasts to telegraph that Board members now have an open mind on easing, should it be necessary”