All-in-all, the dovish set of minutes released today confirm the central bank is closing on rate cuts and will likely deliver at least two in the next seven months.
As a result, the odds of a June interest rate cut rapidly increased in response to the comments, driving the Australian Dollar to US Dollar (AUD/USD) exchange rate into a fresh slump this morning. Since then markets and forecasters have largely moved in that direction.
This change in forecast reflects the lift in the unemployment rate for April from 5.1% to 5.2% and the confirmation from the Governor that the Board would be closely following developments in the labour market with the primary focus on the unemployment rate.
Lowe on Tuesday said the RBA was considering cutting interest rates, the first cut in three years, to stimulate an economy slowing due to sluggish consumer spending and with lukewarm inflation.
The Governor's thinking has evolved over the year to accept that, as we have observed in other countries, upside inflation risks are consistent with a lower unemployment rate than had previously been assessed.Читайте также: FAA chief has no timetable for Boeing 737 MAX approval
He said there was a range of options to help cut the jobless rate.
"The RBA are reluctant rate cutters". Futures jumped to imply around an 88% probability of a quarter-point cut in the 1.5% cash rate in June, from less than 60% at the start of the week.
Dr. Lowe noted that while there had been a lift in wages growth, it was still well short of what would be expected with unemployment around 5 percent. The RBA last eased policy to a record low 1.50% in August 2016.
Further, the minutes stated that risks to the household consumption growth and global economy are tilted to the downside.
Westpac Chief Economist Bill Evans tells Ross Greenwood the economy will approve with time.При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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