7 Feb 2014
Flash: RBA may start hiking rates Q4 2013/Q1 2014 - RBS
FXStreet (Bali) - RBA forecasts suggests rates bottomed and may rise in 9 to 12 months, notes Greg Gibbs, FX Strategist at RBS.
Key Quotes
"The RBA raised its growth forecasts for current year and the next three by a quarter point (to 2.75% at Q2-2014, and midpoints of 2.75% at end-2014, 3.0% at Q2-2015, 3.5% at end-2015, 3.75% at Q2-2016). Trend growth might be regarded as a little above 3.0%. It raised its inflation forecast for the key underlying measures by half a percentage point for the current year to 3.0%."
"The RBA outlined a number of uncertainties over why inflation was higher than expected recently (some benign, others not) generating both upside and downside risks to their inflation forecasts and taking away scope to cut rates. It is part of the reason they have moved to a rates on hold guidance."
"As you would expect the key points in this statement are largely the same but in more detail to the more upbeat assessment in the press release on Tuesday. It is consistent with the RBA moving to a neutral stance on rates from a dovish stance."
"Risks are fairly evenly balanced at this time suggesting that it thinks rates are close to having reached a bottom, firmly on hold for the time being, but likely to eventually rise to normalised policy as growth moves towards trend and above."
Key Quotes
"The RBA raised its growth forecasts for current year and the next three by a quarter point (to 2.75% at Q2-2014, and midpoints of 2.75% at end-2014, 3.0% at Q2-2015, 3.5% at end-2015, 3.75% at Q2-2016). Trend growth might be regarded as a little above 3.0%. It raised its inflation forecast for the key underlying measures by half a percentage point for the current year to 3.0%."
"The RBA outlined a number of uncertainties over why inflation was higher than expected recently (some benign, others not) generating both upside and downside risks to their inflation forecasts and taking away scope to cut rates. It is part of the reason they have moved to a rates on hold guidance."
"As you would expect the key points in this statement are largely the same but in more detail to the more upbeat assessment in the press release on Tuesday. It is consistent with the RBA moving to a neutral stance on rates from a dovish stance."
"Risks are fairly evenly balanced at this time suggesting that it thinks rates are close to having reached a bottom, firmly on hold for the time being, but likely to eventually rise to normalised policy as growth moves towards trend and above."