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22 Apr 2015
Market pricing in total further easing of 40bp by the RBA – Westpac
FXStreet (Barcelona) - RBA is expected to cut rates by 25bp in May, and markets are pricing in a 55% chance for the same along with a total 40bp worth of rate cuts by the Australian central bank, notes Westpac.
Key Quotes
“The RBA surprised the markets by leaving rates on hold in April.”
“Westpac looks for another 25bp cut to 2% in May, reinforced by the April statement. While holding steady, the RBA said this was “for the time being”, a phrase which has been quickly followed by a rate change on 8 occasions in the past 5 years.”
“Inflation was a touch higher than we expected but at a muted 1.3% y/y total, 2.3% y/y core, the door is still open for the RBA to cut rates in May and provide further details in the 8 May Statement on Monetary Policy. However we then expect the cash rate to be held steady for some time.”
“Markets are pricing a 55% chance of a May cut and total further easing of 40bp.”
Key Quotes
“The RBA surprised the markets by leaving rates on hold in April.”
“Westpac looks for another 25bp cut to 2% in May, reinforced by the April statement. While holding steady, the RBA said this was “for the time being”, a phrase which has been quickly followed by a rate change on 8 occasions in the past 5 years.”
“Inflation was a touch higher than we expected but at a muted 1.3% y/y total, 2.3% y/y core, the door is still open for the RBA to cut rates in May and provide further details in the 8 May Statement on Monetary Policy. However we then expect the cash rate to be held steady for some time.”
“Markets are pricing a 55% chance of a May cut and total further easing of 40bp.”