Westpac note in response to the deteriorating economic position in Australia due to ongoing and expanding lockdowns.

  • Our revised estimates point to a likely contraction in the national economy of 0.7% in the September quarter, at a cost of around $8 billion. However, with a strong bounce back expected in the December quarter

On implications for the RBA:

  • we believe a better approach would be to announce in August that the Board will instead review the taper decision at the September meeting
  • ... Markets would be alerted to the possibility that a decision could be made to actually lift purchases from the week of September 10 to $6 billion per week with a review in November.
  • ... If our forecasts prove to be correct a September decision to lift purchases on a temporary basis would be entirely reasonable.

When this is all over I hope someone buys this guy a beer or three

rba governor Lowe