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9 Apr 2015
RBA might ease again in May – Westpac
FXStreet (Barcelona) - The Research Team at Westpac believes that a cash rate at 2% is highly likely in May, expecting the Australian central bank to stick to its easing bias and cut the interest rate by 25bps in May.
Key Quotes
“AUD/USD rallied more than a cent in the wake of the RBA statement as yields rose and investors pondered whether the expected cut would come no later than May and whether market pricing for yields below 2% was too aggressive.”
“As for May, Westpac believes a cash rate cut to 2% is very likely.”
“Governor Stevens’ statement declared that further easing may be appropriate and included the phrase “for the time being” to qualify the steady hand. This has been a very reliable signal of an imminent move over the past 5 years.”
“The RBA will have chosen it with the knowledge that markets would price a strong chance of a May move (and in doing so, help cap AUD rallies). May is of course also a month which includes the quarterly Statement on Monetary Policy.”
Key Quotes
“AUD/USD rallied more than a cent in the wake of the RBA statement as yields rose and investors pondered whether the expected cut would come no later than May and whether market pricing for yields below 2% was too aggressive.”
“As for May, Westpac believes a cash rate cut to 2% is very likely.”
“Governor Stevens’ statement declared that further easing may be appropriate and included the phrase “for the time being” to qualify the steady hand. This has been a very reliable signal of an imminent move over the past 5 years.”
“The RBA will have chosen it with the knowledge that markets would price a strong chance of a May move (and in doing so, help cap AUD rallies). May is of course also a month which includes the quarterly Statement on Monetary Policy.”