VIEW: RBC note that "for a few months now we....>

RBA: VIEW: RBC note that "for a few months now we have highlighted the risk of

RBA policy normalisation beginning later than H1 2019. This view was driven by 3

key factors which have largely played out - emerging downside risk to global

growth with the PBOC shifting stance, ongoing uncertainty around the degree of

space capacity in the AU labour market and lingering funding pressures with the

potential to impact broader financial conditions. Additional risks from the

unfolding drought and rising political uncertainty add to this view.

Accordingly, we are pushing back the timing of our first RBA hike to Q4 2019 and

expect the RBA to follow up in Q1 2020 and then sit at 2% for some time.

However, we admit to thinking about dropping these hikes altogether. The longer

the RBA sits at 1.50%, the less sure we are about the direction of the next

move, especially if global activity turns more modest in H2 2019 and 2020. Our

key message, therefore, is one of an RBA on hold for the foreseeable future,

consistent with our long-held bias in recent years of a lower-for-longer

thematic for official cash."