VIEW: TD write that "market sentiment has.......>

RBA: VIEW: TD write that "market sentiment has soured. A loss of conviction in

the Federal Reserve tightening cycle, an escalation of UK Brexit vote woes, and

a Chinese growth slowdown all offer an uncertain global backdrop heading into

2019. Closer to home, house prices have been falling for over a year, and

concerns escalated last week when consumer spending growth was markedly absent

in the Sep qtr GDP report. Subsequently, market pressure on the RBA to cut to

support house prices and consumer spending has intensified. The OIS strip is

currently tracking below the 1.5% cash rate through to Q2 2020. We are

unconvinced that a rate cut can boost house prices, given now entrenched

enhanced ADI prudential supervision. The AUD is calmly trading around

$US0.72-0.73 despite global market volatility. We see no need for a cash rate

reduction to lower the currency, as trade continues to thrive. The risk to our

base case (November 2019 hike) is skewed towards low for longer for the RBA,

staying at 1.5% into 2020. However, the sub-cash bill strip is far too

pessimistic given otherwise favourable economic fundamentals."