VIEW: TD write "after digesting the RBA's.......>

RBA: VIEW: TD write "after digesting the RBA's words and deeds, we have to

respect the RBA's endless patience and "reluctant cutter" stance, and we look

for the first cut in August follow by another cut in November to 1%. The RBA

claimed "... the Board will be paying close attention to developments in the

labour market at its upcoming meetings". A cut in June/July then requires an

immediate drastic deterioration in labour market fundamentals, which we do not

expect so soon. While we still expect a monetary policy response to

weaker-for-longer inflation, we remain of the view that fiscal policy is more

likely to immediately boost spending and provoke businesses into investing and

employing. The election on May 18 is a close call, and in fact the polls are so

close that there is a strong possibility of a hung parliament, i.e. lower and

upper houses stitched together with minor parties/independents. It is near

impossible to pass unpopular legislation under that scenario, but cash handouts

tend to be approved quickly."