Largest Australian fund manager says be wary of RBA rate cut sooner rather than later
Via Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist, AMP Capital
Comments on the RBA from longer note:
Australian data releases over the last week continued the weak run seen since Christmas
- falls in housing finance, new home sales, housing starts and consumer confidence
- Melbourne Institute's Inflation Gauge perked up a bit in December but it's a bit volatile month to month and in any case both on a headline and underlying basis is running below the RBA's 2-3% inflation target.
House prices risk falling further than we are allowing for. …
- The threat this poses to consumer spending along with rising bank funding costs and out of cycle mortgage rate hikes reinforces our view that the RBA will cut interest rates this year but the cuts could come earlier than the second half that we have been allowing for.