2 Dec 2014
RBA to make reference to the possibility of rate cuts? - RBS
FXStreet (Bali) - While RBS expects the RBA to stick to established neutral language, they note that after last week's RBA's Lowe speech, it is possible that the RBA makes a reference to the possibility of rate cuts today.
Key Quotes
"The slow start to what should prove to be a busy week (ECB decision Thursday, US employment on Friday) may resume Tuesday, as the calendar appears to lack tier 1 releases."
"Australia is the notable exception on the G10 calendar, however, as the RBA monetary policy decision is due and the latest monthly building approvals data are released as well."
"On the domestic front, the state of the housing market is among the most pressing concerns for the RBA – a slowdown in the elevated pace of mortgage lending and house price growth may put additional rate cuts on the table, particularly if the RBA opts to use macroprudential measures to slow the housing market."
"Comments from RBA Governor Stevens and Deputy Governor Lowe suggest that the RBA is still uncomfortable with the level of the AUD."
"After Deputy Governor Lowe said in a speech that rate cuts are still an option if needed, it is possible that the RBA makes a reference to the possibility of rate cuts this week."
"Still, we think the RBA will stick to established language on the policy rates, calling stability in rates the most prudent course."
Key Quotes
"The slow start to what should prove to be a busy week (ECB decision Thursday, US employment on Friday) may resume Tuesday, as the calendar appears to lack tier 1 releases."
"Australia is the notable exception on the G10 calendar, however, as the RBA monetary policy decision is due and the latest monthly building approvals data are released as well."
"On the domestic front, the state of the housing market is among the most pressing concerns for the RBA – a slowdown in the elevated pace of mortgage lending and house price growth may put additional rate cuts on the table, particularly if the RBA opts to use macroprudential measures to slow the housing market."
"Comments from RBA Governor Stevens and Deputy Governor Lowe suggest that the RBA is still uncomfortable with the level of the AUD."
"After Deputy Governor Lowe said in a speech that rate cuts are still an option if needed, it is possible that the RBA makes a reference to the possibility of rate cuts this week."
"Still, we think the RBA will stick to established language on the policy rates, calling stability in rates the most prudent course."