Free Trial

MNI Australia NAB Says RBA Hike Cld Be Delayed Beyond Mid-2019

--In Late May NAB Pushed Back RBA Hike Forecast To May 2019 from Nov 2018
By Sophia Rodrigues
     SYDNEY (MNI) - Less than two months after pushing back their forecast for
the first hike in the Reserve Bank of Australia's cash rate in this cycle,
economists at National Australia Bank think there is a chance that the timing
may be delayed further.
     In a note published Wednesday, NAB's chief economist Alan Oster is pointing
to new downside risks to the outlook from global trade wars and the local labor
market.
     The increasing potential for trade wars could lower global growth and
reduce Australian prospects, he said. There are also some emerging signs of
softness in the leading indicators on employment growth, he added.
     These new risks are in addition to existing concerns about the outlook for
consumption and NAB economists think that even with moderate uptick in wages,
consumption growth may not do much better than 2.5% over the forecast horizon.
     On the upside, they now see the probability of new investment from the
mining sector.
     Overall, NAB sees the balance of risks as neutral "but possibly a touch to
the downside."
     They are retaining the view that the RBA would start to raise the cash rate
from May 2019 but this is very data dependent and "it would well be that the
timing may be delayed."
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MALDS$,MMLRB$,M$A$$$,M$L$$$,MT$$$$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.