Comments from NAB in the wake of yesterday's CPI and Governor Stevens speech
This is from 2 separate client notes from NAB
In response to Stevens:
- RBA on hold for now
- Asked about the prospect for further rate cuts ... said it while it remains on the table a balance has to be found ... RBA ... seeking a stance that will most effectively foster sustainable growth, emphasising the differences between risk - taking behaviour to generate economic growth and the dangers of excessive financial risk taking
- A refusal to be drawn on whether the AUD has fallen enough. Asked about the RBA ' s line that a further fall is both ' necessary and likely; ... said the AUD is adjusting as you would expect
On CPI:
- moderate inflation - in the lower half of the 2 - 3% target band in underlying terms - buys the RBA more time to leave the already accommodative stance of monetary policy unchanged
- NAB continues to expect that monetary policy will remain on hold this year and into next, especially with tentative evidence of improvement in high frequency indicators and a steady unemployment rate of late
- NAB's economic forecast is consistent with a rise in the cash rate late in 2016