VIEW: CBA Still Look For One More Hike

CBA write “we said in our preview note that, “a pause in April coupled with a hiking bias makes a lot of sense. And that is now our base case. If the RBA delivers on this outcome we will retain our call that the terminal rate will be 3.85% in this cycle. But we would then state the risk to our view is that the hiking cycle is over and the next move is down.” We stick with this statement and we retain our central scenario that the terminal rate will be 3.85%. We believe the risk to our call is that the current 3.60% cash rate is the peak in this cycle and the next move is down. We continue to expect 50bp of easing in Q423 followed by a further 50bp of rate cuts in H124.”

• “The Governor is speaking tomorrow on Monetary Policy, Demand and Supply at the National Press Club tomorrow. Governor Lowe will have the opportunity to more fully flesh out the RBA’s latest thinking on the economy and outlook for monetary policy.”