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10 Dec 2014
Australia: Cash rates may be cut by 50 bps in 2015 – NAB
FXStreet (Barcelona) - Alan Oster, Group Chief Economist, National Australia Bank, anticipates the RBA to cut cash rates by 25bps in March and August 2015, in lieu of soft commodity prices and below than expected Q3 GDP growth.
Key Quotes
“Softer commodity prices in October are expected to persist and subtract over $25b from export earnings in 2014/15 compared with our previous forecasts. Business conditions softened in November but are largely in line with long-run averages. The employment outlook remains soft and business confidence retreated – indeed the latter is increasingly concerning.“
“GDP growth in Q3 of 0.3% was below expectations and probably overstates the real position, but continues to point to soft (possibly even declining) demand.”
“We have changed our view on the cash rate and now expect two of 25 bp cuts in March and August 2015 then remaining on hold until late 2016.“
Key Quotes
“Softer commodity prices in October are expected to persist and subtract over $25b from export earnings in 2014/15 compared with our previous forecasts. Business conditions softened in November but are largely in line with long-run averages. The employment outlook remains soft and business confidence retreated – indeed the latter is increasingly concerning.“
“GDP growth in Q3 of 0.3% was below expectations and probably overstates the real position, but continues to point to soft (possibly even declining) demand.”
“We have changed our view on the cash rate and now expect two of 25 bp cuts in March and August 2015 then remaining on hold until late 2016.“