RBA: Very balanced statement – ING

Robert Carnell, chief economist at ING, points out that the Reserve Bank of Australia has cut policy cash rates form 1.5% to 1.25% after more than 3 years

Key Quotes

“Data since the last meeting has been on the softer side, with weaker PMI indices, and soft retail sales today notable downside misses. Though on the plus side, it does look as if there may be some tentative signs of stabilisation in the Sydney housing market.”

“The full statement of Governor Philip Lowe that accompanied the cut was very balanced. Indeed, it is hard to view the easing bias to policy remaining from reading the text.”

“Our forecast is for just one more policy rate cut of 25bp in August taking the cash rate down to 1.0%. Given the race by other forecasters to be the most aggressive in penciling in cuts in recent weeks, this feels a good position to be in. But even our forecast cut is now data dependent and may prove to be too aggressive.”