RBA to deliver a 2nd cut this Year . November favoured over October.
Good afternoon.
As expected by all and sundry, the RBA has moved to a less restrictive stance of monetary policy with a 25 point cut of the cash target rate from 7.0% to 7.25%.
There has been very little reaction, a clear result of the RBA's effective transparency.
Next move by the RBA wil deliver a second rate cut of 25 points, with November the clear favourite, and the RBA has used purposeful language, in my view.
Now here is the RBA word play.
Today's statement included this summary.
Sep 08 statement.On balance, however, it is looking more likely that household demand will remain subdued and overall economic growth slow over the period ahead.
This sentence is a cut and paste from last month.The RBA has repeated the demand and growth outlook and this is a clear indication that another cut wil be delivered, in the near term.
Aug 08 statement.On balance, however, it is looking more likely that demand will remain subdued, and economic growth will be fairly slow, over the period ahead.
However, the timing is not immediate.
Weighing up the available domestic and international information, the Board judged that there was now scope for monetary policy to become less restrictive.
One month ago the RBA concluded:
Weighing up the available domestic and international information, the Board judged that the cash rate should remain unchanged this month. Nonetheless, with demand slowing, the Board’s view is that scope to move towards a less restrictive stance of monetary policy in the period ahead is increasing.
Some water is still to flow under the bridge, with November 08 the favoured month.
The RBA wil not be concerned that the Melbourne Cup will be run on that day, as the Board raised rates in November 2007 and November 2006
|
If you wish to have any of the above points explained, wish to make a trade or
have any further enquiries please contact John Craig by phone on
(02) 8243 3526 or by email:
jcraig@bellcommodities.com.au |
|
