VIEW: RBC note that "a return to level....>

AUSTRALIA: VIEW: RBC note that "a return to level 3 restrictions for most of

Victoria for the next 6 weeks will have an immediate impact upon activity. More

worrying is the risk of a larger and more enduring hit to biz confidence than

earlier in the year amid heightened uncertainty & the accompanying implications

for hiring, investment & innovation longer term. SMEs are particularly

vulnerable. We adj. our growth forecasts accordingly, taking Q3 GDP down by

0.6%. However, given a likely better starting point for Q2 & our long held view

of only a modest & partial recovery well into '21, we expect GDP to contract by

a marginally better -3.7% in '20 with '21 growth slightly lower at 2.3%. The

risk to confidence from the re-instatement of restrictions casts some downside

risk to our GDP forecasts. The Victorian developments add weight to our view

that further fiscal stimulus in Q4 is likely & we have assumed this in our base

case for some time through a tgtd extension of the JobKeeper program and/or

industry assistance. Victorians will now likely be disproportionately

represented in any revised programs. There is also merit in a more immediate

Victorian specific package."