VIEW: Thursday saw TD Securities recommending...>

RBA: VIEW: Thursday saw TD Securities recommending a receive Oct RBA meeting OIS

position at 0.81%, targeting a cut at next week's meeting (0.75%).

- TD note that Lowe's "speech to the Armidale Biz Chamber did not cement a 25bp

cut next week. However, we believe the Bank is likely to ease at the meeting.

The RBA's Aug SoMP tech assumptions assumed the cash rate moves in-line with

market pricing and the Aug RBA Minutes noted "A 25 basis points reduction had

been fully priced in by November 2019". Q2'19 GDP at +0.5%/q missed the RBA's

+0.75%/q forecast and the RBA Gov noted in his Armidale address "we did not

expect this slowdown, so it has come as a bit of a surprise". This miss means

the RBA is already playing catch up to achieve its late 2019/2020 GDP forecasts

that assume a 25bps Nov cut is delivered. Markets are pricing ~ a 75% chance to

a 25bps RBA cut next week, the bulk of the analyst community has moved forward

the Nov cut to Oct and the RBA's Sep Minutes removed any reference to "the

accumulation of additional evidence" for it to cut that had appeared in the Aug

Minutes. With the RBA playing catch-up to its GDP f/c's and wages growth looks

to have stalled, there is little reason for the RBA to wait to Nov to cut."