RBA will make two more 25bps cuts in 2017 - BNZ

Kymberly Martin, Senior Market Strategist at BNZ, suggests that yesterday their NAB colleagues made some changes to their RBA view and they now anticipate the RBA will make two more 25bps cuts in 2017, taking the cash rate to a new low of 1.0%.

Key Quotes

“They expect AU CPI inflation to remain below the RBA’s target band for an extended period, while structural shifts in the economy and modest economic growth put pressure on the labour market in the longer-term. They are not as quiescent as the RBA with respect to house prices. They are also not convinced lower rates will have a material impact on inflation. But they do expect the RBA will react by providing further support.”