VIEW: NAB write "while the RBA cut its..........>

RBA: VIEW: NAB write "while the RBA cut its near-term growth & inflation

forecasts - and delayed the return of inflation to the lower part of the band -

the Bank continues to forecast a central scenario of trend/above-trend GDP

growth & some further improvement in the unemployment rate. That said, the RBA

reiterated that a further decline in the unemployment rate is a necessary

condition to lift wages & return inflation to target. NAB's view has been that

the RBA would need to cut rates over the remainder of this year as growth was

unlikely to be strong enough to produce further improvement in the unemployment

rate - that view remains in force. Our view continues to be that the Bank will

cut rates by 25bp in July and again in November. In terms of what might need to

occur for the Board to reduce rates, we'd likely need to see some of the

following: (i) the unemployment rate tracking higher; (ii) the leading

indicators of the labour market deteriorating (job ads, job vacancies, NAB

employment survey); (iii) the Bank's growth forecasts continue to be revised

lower meaning that the unemployment forecast does not continue to improve in the

out years (or begins to deteriorate)."