VIEW: J.P.Morgan note that "the distribution....>

RBA: VIEW: J.P.Morgan note that "the distribution of risks to global & domestic

growth have shifted to the downside. Fed officials are now actively talking

about the possibility of policy support. Global financial mkts have started to

price in a non-trivial chance of global recession. These 3 factors mean that the

case for an easing from the RBA in March is clear. The Bank will be responding

foremost to protect against the higher chance of global recession. While we are

forecasting a 25bp cut tomorrow, we acknowledge that the chance of a 50bp cut is

not small. The RBA are 50bp from the ELB. In this context, conventional central

bank wisdom suggests that the policy of least regret is to move quickly once it

becomes clear that there are material downside risks to the modal forecasts for

growth and inflation. This is precisely the situation the RBA Board will face on

Tuesday. There is also the possibility that the RBA brings other policy measures

(liquidity related) into play tomorrow. In Australia, we doubt whether these

measures would differ too much from those the Bank introduced in 2008/09. We

expect a follow up 25bp easing in April. Were this forecast to be realized, we

think that QE is still likely to be a story for 2H20."