Earlier I posted on: RBA meeting this week-Westpac on what to expect (Spoiler ... Hold)

National Australia Bank now, firstly from their weekly outlook, in (very) brief:

  • Interest rate market holding to its mild easing bias, looking for any signs that the Bank is at all closer to seriously consider more monetary easing. We doubt this will be evident in Tuesday's post Board meeting media release.
  • Global economy remains under close scrutiny
  • Continuing risks to the Chinese economy we doubt the RBA will diverge from its forecast of continuing average growth in Australia's major trading partners
  • Also front of mind is the US economy and how close the Federal Reserve is to a lift-off. That time has clearly not yet arrived
  • A steady to lower trend in the Australian dollar will be of some comfort to the RBA, buying them more time to leave the cash rate unchanged
  • Business conditions higher again in August
  • Data that we've seen over the past month has overall continued to add more weight to the view that the economy is continuing with its transition towards more domestic-oriented growth
  • Last this week's building approvals report for August was a reminder that residential building activity cycle might well be running its course
  • Growth in residential investment spending set to fade as we progress through 2016


Meanwhile, chief economist of the NAB, Ivan Colhoun, has six reasons the RBA won't cut:

  1. Non-mining economy is recovering
  2. Mining investment and weaker commodity prices are restraining the economy, but there are not interest sensitive
  3. Those sectors that are interest rate sensitive are already strong
  4. Rates are already low and are not restraining growth ... still some effects of the most recent rate cuts to flow through to the economy
  5. AUD is at levels where it will stimulate the economy
  6. Says the RBA has 200bps of "ammunition" left ... this shouldn't be used this in the current environment where the data is improving