VIEW: Westpac now expects that "the RBA will....>

RBA: VIEW: Westpac now expects that "the RBA will delay its next cut in the cash

rate to Apr with the final cut to 0.25% occurring in Aug. Prior to the release

of the surprisingly strong Dec Employment Report we had exp. the cuts to be

timed for Feb & June. Our analysis of the Dec Board Minutes highlighted that,

with the Board committing to review its assessment of the econ in Feb, it seemed

likely that the Board would have been prepared to cut the cash rate by 0.25% at

that meeting. However we did note that, "The flow of economic data over the next

six weeks will be critical to that decision, particularly the labour market;

retail sales and confidence". Although the Nov retail sales report printed a

strong 0.9% we were comfortable to attribute much of that out performance to the

"Black Friday" effect... Westpac-MI Consumer Sentiment Index fell by 1.8% in

January to 93.4 - consistent with a down beat consumer. However, the Employment

Report was always going to be the most important release."