MICHAEL TURNER, STRATEGIST AT RBC CAPITAL MARKETS
“Our first take of the statement is that there is nothing suggesting an urgency for a December cut. December is not any more likely than today. A December cut? Maybe maybe not, our forecast is still for a move early next year.”
ANNETTE BEACHER, HEAD OF ASIA-PAC RESEARCH, TD SECURITIES
“We have a clear easing bias, but the Australian dollar is particularly unmoved and bond yields are also unmoved. So we are wondering why that is the case. To me this it the shift that doves were looking for. But by definition, there is a small disappointment trait, given that 12 out of 29 were looking for a cut so there is that initial disappointment.
“They have left a clear easing bias on the table. The outlook for inflation affords scope so we should see downgrades to inflation on Friday in its statement on monetary policy.
“They decided that the next move is likely to be down. From our perspective, we are leaving the cash rate on hold for December but that meeting is live, just like the [Federal Open Market Committee]. At this stage, we are not calling for a cut until I read the statement to see whether they are balanced or more dovish.”
TOM KENNEDY, ECONOMIST, JP MORGAN, SYDNEY
“They’ve left the cash rates steady but have put an easing bias into the statement. That means there is scope for further easing of policy should that be appropriate.
“They’re saying dollar is adjusting to developments in the commodities market so all is fine on that front.”
JASMIN ARGYROU, SENIOR INVESTMENT MANAGER, ABERDEEN ASSET MANAGEMENT:
“Economic conditions remain stable enough to justify keeping the cash rate on hold, although the RBA has kept open the possibility of future cuts if conditions deteriorate. We think this is the right call for now.
“While the recent surprise increases in home loan rates by the major banks have increased the cost of some loans, this is not the case for all loans. At the same time, a weaker Australian dollar continues to support the economy by making life easier for businesses relying on the sale of goods overseas.”
JAMES MCINTYRE, MACQUARIE BANK
Following RBA decision to leave cash rate unchanged today, Macquarie chief economist James McIntyre now expects the RBA to cut in February.
He, however, thinks that the decision to keep rates on hold in November has increased the prospects that the RBA ultimately cuts the cash rate to 1.50% in first half of 2016. “Ultimately, we remain of the view that the mix of challenges – both internal and external – confronting the economy at present and over the year ahead requires a significantly undervalued currency. Until the A$ pushes into the US$0.60-0.65 cent range, and remains there for an extended period, the risk of further policy support (monetary and fiscal) remains elevated.”