Macquarie Bank with a take on Reserve Bank of Australia Governor Lowe yesterday and his shift to neutral for the bank
- Lowe explicitly shifted to a neutral bias … brings the Bank's thinking in line with our own central scenario for the cash rate outlook (i.e. no change by end 2020 at least)
- growth forecasts have been lowered... an implicit admission that the Bank's growth forecasts have been too optimistic
- What is key … the Bank has reassessed the inflation outlook … What we didn't expect, however, was the end forecast for inflation to be revised down
- The entire profile of the Bank's core inflation forecasts has been revised lower … Forecast core inflation doesn't even reach 2.2% by mid-2021. That is what caught us by surprise
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AUD dropped on Lowe yesterday and extended the fall in following hours and overnight. Its been the NZD lower so far today in Asia on the back of the weaker than expected jobs report.
