MNI: PBOC Conducts CNY2 Bln Via OMO Tues; Liquidity Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS TUES

MNI: PBOC Sets Yuan Parity Higher At 7.1310 Tues; -0.50% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1310 TUES VS 7.1286

MNI BRIEF: China Must Unblock Domestic Circulation - Wang

MNI China Daily Summary: Monday, July 8

MNI: UK BRC JUN BY VALUE SHOP SALES LFL -0.5% YY, TOTAL -0.2% YY

BRC-KPMG Retail Sales Fell For The First Time (ex Easter Anomaly) Since Jun-22

Consumer Credit Growth Picks Up In May, But Overall Dynamics Subdued

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

VIEW: CBA Pushes Out First Rate Cut To November

RBA
HomepageBulletMarketsFixed Income BulletsForeign Exchange Bullets

CBA has revised its RBA cash rate forecast for this year. It now expects the rate cut to be in November rather than September and as a result there is likely to be only 25bp of easing in 2024 rather than the 75bp CBA previously expected. The shift was driven by last week’s stronger-than-expected Q1 CPI print.

  • “The near term risk sits with an interest rate hike.But we expect the RBA to be on hold over the next six months given the economy is still contracting on a per capita basis, inflation is forecast to fall further and the labour market is anticipated to loosen.”
  • “We now see a more elongated and conservative easing cycle than previously expected.Our base case sees the cash rate gradually cut from November 2024 to reach 3.10% at end-2025 (a level we believe is just above neutral).”
  • “The RBA Board may restore its hiking bias at the upcoming May Board meeting.But on balance we expect an ‘on hold’ decision to be accompanied by a neutral bias, in line with the policy decision and Statement from the March Board meeting.”
  • “The RBA has been successful in bringing down discretionary inflation. But dropping non-discretionary inflation is proving to be a more difficult challenge.”
  • “We believe that incredibly strong population growth, driven by net overseas immigration, has put upward pressure on some important components of the CPI basket; most notably the housing-related components.As a result, demand is stronger and so inflation is falling less quickly than otherwise.”
245 words

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.

CBA has revised its RBA cash rate forecast for this year. It now expects the rate cut to be in November rather than September and as a result there is likely to be only 25bp of easing in 2024 rather than the 75bp CBA previously expected. The shift was driven by last week’s stronger-than-expected Q1 CPI print.

  • “The near term risk sits with an interest rate hike.But we expect the RBA to be on hold over the next six months given the economy is still contracting on a per capita basis, inflation is forecast to fall further and the labour market is anticipated to loosen.”
  • “We now see a more elongated and conservative easing cycle than previously expected.Our base case sees the cash rate gradually cut from November 2024 to reach 3.10% at end-2025 (a level we believe is just above neutral).”
  • “The RBA Board may restore its hiking bias at the upcoming May Board meeting.But on balance we expect an ‘on hold’ decision to be accompanied by a neutral bias, in line with the policy decision and Statement from the March Board meeting.”
  • “The RBA has been successful in bringing down discretionary inflation. But dropping non-discretionary inflation is proving to be a more difficult challenge.”
  • “We believe that incredibly strong population growth, driven by net overseas immigration, has put upward pressure on some important components of the CPI basket; most notably the housing-related components.As a result, demand is stronger and so inflation is falling less quickly than otherwise.”