Back
28 Jan 2015
Two rate cuts by the RBA expected in 2015 - NAB
FXStreet (Bali) - Alan Oster, Group Chief Economist at National Australia Bank, still expects two rate cuts by the Reserve Bank of Australia during 2015, with his core view being the first one occurring in March and the second in August.
Key Quotes
"Fully factoring in lower oil and other commodity forecasts have created a larger “v” in the shape of our activity forecasts – softer in the near term (2014/15) as iron ore/coal effects dominate but stronger in the medium term (2015/16) reflecting oil prices, rate cuts and marginally stronger MTP growth and exports."
"Cuts to national incomes and lower inflation are key short term outcomes. Core CPI 13⁄4% by Q1 2015. Unemployment to continue to deteriorate but peak lower (6.6%) and later (Q4 2015). Still expect two rate cuts in 2015 but timing very dependent on data flow and could start a touch later."
"Given our expectation for softer near term activity, we still expect two rate cuts in 2015 –although the timing is very dependent on data flow and could start a touch later than expected (March and August). Unemployment to continue to deteriorate but peak lower (6.6%) and later (Q4 2015). GDP forecasts cut in near term, but recovers faster: 2014/15 2.3% (was 2.5%); 2015/16 3.2% (was 3.0%)."
Key Quotes
"Fully factoring in lower oil and other commodity forecasts have created a larger “v” in the shape of our activity forecasts – softer in the near term (2014/15) as iron ore/coal effects dominate but stronger in the medium term (2015/16) reflecting oil prices, rate cuts and marginally stronger MTP growth and exports."
"Cuts to national incomes and lower inflation are key short term outcomes. Core CPI 13⁄4% by Q1 2015. Unemployment to continue to deteriorate but peak lower (6.6%) and later (Q4 2015). Still expect two rate cuts in 2015 but timing very dependent on data flow and could start a touch later."
"Given our expectation for softer near term activity, we still expect two rate cuts in 2015 –although the timing is very dependent on data flow and could start a touch later than expected (March and August). Unemployment to continue to deteriorate but peak lower (6.6%) and later (Q4 2015). GDP forecasts cut in near term, but recovers faster: 2014/15 2.3% (was 2.5%); 2015/16 3.2% (was 3.0%)."