Commentary following RBA deputy governor Guy Debelle's speech
- Says that Debelle's speech is AUD positive
- Suggests that RBA is open to cutting the cash rate, but is in no rush to do so
- Notes that RBA is willing to sit back, "perhaps for several months" to see how global developments unfold and how domestic tensions are resolved
Nomura does maintain its view for growth below trend and inflation running low, leading to two 25 bps rate cuts this year though. However, the firm says that it might have to revise the particular months penciled in for the moves. Their current forecast is for the RBA to cut rates in July and August this year.
I think the RBA meeting last week basically signaled that policy meetings moving forward could very well be 'live'. But it's going to take deteriorating conditions in the labour market as well as further worsening in global growth conditions to push them to cut rates in my view. The possibility for that to happen in 2H 2019 looks likely but let's see how things develop in the coming months first.
