RBA endorsing pricing of a near term rate cut? – JPMorgan
FXStreet (Bali) – According to JPMorgan Strategists, Thursday’s speech by RBA Stevens was the most important communication for some time.
“Stevens said the market is wrong in underestimating the risk that AUD could fall significantly and that the Bank has ammunition to move on policy if needed.”
“He appeared to endorse market pricing implying a near term rate cut is more likely than a hike.”
“He sounded more downbeat than before in the economy indicating that the pace of transition has lost steam since the summer.”
“Lengthy comments on housing did much to diminish the market’s importance as a near term driver of policy, undermining the argument run by some that the RBA needed to lift rates soon to take some steam from the major capital city markets.”
“Said the Board is not even thinking about raising the cash rate.”
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