VIEW: Terry McCrann reiterates that the RBA.....>

RBA: VIEW: Terry McCrann reiterates that the RBA will cut its cash rate next

week. He writes "the big 4 banks - can't say the same about the smaller ones -

will, broadly, follow with 0.25% cuts to their mortgage rates. Commentators

predicting, they might or should cut by more, on the basis of the somewhat

bigger fall in their overall funding costs, are overly arithmetic & inadequately

analytical. Yes, that might be true of this 25bp; but it wouldn't be of the next

25bp (if it came). I would assume that no bank would be stupid enough to

deliver, say, a 30bp cut after next week - only to have to then under-cut with,

say, 15bp at the next RBA rate cut. The absolutely basic thing to understand is

that next week's cut is the only cut the RBA has locked in. As the late great

Robert Holmes a Court used to say: the RBA has "no present intention" of cutting

a 2nd time. Yes, it might broadly think it probably will deliver a 2nd cut. Yes,

it can analytically feel that it might end up delivering even more cuts. But

right now, it's 25bp & then the RBA will step back to analyse & try to

anticipate in 24/7 real-time. The other big thing seemingly not well understood

is that we got a fundamental 'game-changer,' the election result."