VIEW: Goldman Sachs: Lowe Signals More Easing

Goldman Sachs note that "overall, we viewed the speech (from RBA Governor Lowe) as dovish - including an important pivot in the RBA's reaction function - and raise our subjective odds of an easing package at November's Board meeting to 80% (from 60% previously). In particular, we expect the RBA to lower the cash rate, YCC, and TFF targets by -15bp to 0.1% and announce a new ~A$100bn QE program aimed at reducing longer-term yields. While today's speech increased our conviction that the RBA would undertake additional QE, we note there is still relatively more uncertainty around the exact size, scope and timing of the QE component."