9 Jun 2015
RBA finsihed cutting interest rates - NAB
FXStreet (Bali) - NAB has released its latest Global and Australian Forecasts report today, noting that they see the RBA as finished cutting, barring a setup via their forecasts not being achieved.
Key Quotes
"There was no evidence of an acceleration in the pace of global growth in early 2015. Weak GDP results in the US, UK and Canada outweighed a pick-up in Japan and the Euro-zone and similarly mixed trends among the big emerging economies saw China slowing, India picking up and Brazil still very weak. The monthly manufacturing output and world trade numbers were soft, particularly the latter, and the business surveys do not show any clear evidence yet of an imminent lift in growth momentum. Our forecast is for more of the same this year with global growth staying around 3¼% in 2015, followed by a modest upturn in 2016 (largely driven by the US)."
"On Australia, there is a growing difference between more optimistic short-term data and weaker longer-run expectations. But while some of the partials have improved on the back of a further rate cut and a well received Budget (for business), weakening longer-run capex expectations in the non-mining sector are still a concern. Businesses are still reluctant to employ and consumers remain cautious. Revisions to our growth forecasts have been minor – 2014/15 2.4%(was 2.3%), 2015/16 2.6%(was 2.9%) and unchanged in 2016/17 at 3.0%. The slightly stronger pace from late 2016 largely reflects faster exports as more resource projects come on stream. With domestic demand likely to remain weak, unemployment will rise a touch to around 6.4% by the end of 2015 and stay high for some time."
"Based on our forecasts for activity, the labour market and inflation, we see the RBA as finished cutting – albeit they could still cut if our (and their) forecasts are not achieved. We also see the next move in interest rates as up – but not till late 2016 (and with a lower end point for the cash rate of around 3.5%)."
Key Quotes
"There was no evidence of an acceleration in the pace of global growth in early 2015. Weak GDP results in the US, UK and Canada outweighed a pick-up in Japan and the Euro-zone and similarly mixed trends among the big emerging economies saw China slowing, India picking up and Brazil still very weak. The monthly manufacturing output and world trade numbers were soft, particularly the latter, and the business surveys do not show any clear evidence yet of an imminent lift in growth momentum. Our forecast is for more of the same this year with global growth staying around 3¼% in 2015, followed by a modest upturn in 2016 (largely driven by the US)."
"On Australia, there is a growing difference between more optimistic short-term data and weaker longer-run expectations. But while some of the partials have improved on the back of a further rate cut and a well received Budget (for business), weakening longer-run capex expectations in the non-mining sector are still a concern. Businesses are still reluctant to employ and consumers remain cautious. Revisions to our growth forecasts have been minor – 2014/15 2.4%(was 2.3%), 2015/16 2.6%(was 2.9%) and unchanged in 2016/17 at 3.0%. The slightly stronger pace from late 2016 largely reflects faster exports as more resource projects come on stream. With domestic demand likely to remain weak, unemployment will rise a touch to around 6.4% by the end of 2015 and stay high for some time."
"Based on our forecasts for activity, the labour market and inflation, we see the RBA as finished cutting – albeit they could still cut if our (and their) forecasts are not achieved. We also see the next move in interest rates as up – but not till late 2016 (and with a lower end point for the cash rate of around 3.5%)."