Comments from Stephen Miller, head of Australian fixed income at Blackrock.

Blackrock is the the world's largest asset manager.

"The economy has some really challenging headwinds," Miller said in an interview on Friday in Sydney. "70 cents, I still see that as a reasonable target by the end of this year and I think it probably goes lower in 2016."

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  • BlackRock's longer-term strategy is to bet that the Aussie dollar will fall and that Australian bond yields will decline relative to other advanced economy markets

"I suspect the market is still short Aussie dollars, I suspect the market is still long Aussie rates, but when we get some clean out in positioning and it looks a bit clearer, and you get some compelling entry levels to put on those sorts of trades, that's the time to do that," he said. "We've got some tiny positions on now."

  • Australian 10-year bond yielded 58 basis points more than similar-maturity US Treasuries ... Miller reckons that gap could be "closer to 25" by early 2016 if things play out as he expects.
  • Ultimately, ongoing weakness in business investment is likely to sway the RBA board and the next release of official capital expenditure figures on August 27 may be the catalyst for their next move, according to Miller
  • ... "I expect that sometime after the release of those numbers the RBA will cut again."