VIEW: NAB note that "PM Morrison has said.......>

RBA: VIEW: NAB note that "PM Morrison has said Treasury will soon provide advice

on targeted and scalable measures to support the econ. The measures are likely

to be temporary given that he emphasised the need to ensure the "structural

integrity" of the budget, meaning they could range from subsidies to short-term

tax relief. NAB views this shift in fiscal policy as a very positive

development, but still expects further support from the EBA will be required

given the extent of the shock & since we thought the econ was underperforming

prior to the outbreak. NAB expects a follow-up rate cut of 25bp in April, which

would take the cash rate to the Reserve Bank's self-imposed floor of 0.25%.

Governor Lowe has previously said that the Board would consider QE - focusing on

buying government bonds - at that point, though this will no doubt depend on how

the virus develops. NAB sees QE as a risk if the economy deteriorates by more

than expected, but this might be avoided if the Commonwealth were to increase

its planned fiscal stimulus. Note that data-wise, the February NAB business

survey and cashless retail sales index will provide an initial read on the

impact of the virus on the economy ahead of official indicators."