- Seems likely the AUD will be ‘materially lower’ sometime in the future given the declining terms of trade
- says lower currency would help ease squeeze on trade-exposed sector of economy
- Start of US policy normalisation by the Fed would lessen the RBA’s own policy difficulties
- Domestic household and business confidence has been boosted by the rise in asset markets
- Its not clear yet whether better sentiment will feed through to spending and investment
- Business sentiment plans still subdued, could be a while yet before this changes
- Some rise in home prices was normal, too early to signal any great concern on prices
- lenders and borrowers still need to take care on housing, lending standards need to stay strong
Full text: Remarks to Citi’s 5th Annual Australian & New Zealand Investment Conference
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AUD/USD is lower on Steven’s comments. Note – there is no Q&A scheduled after his remarks.
Interesting comment regarding “US policy normalisation by the Fed would lessen the RBA’s own policy difficulties” given the widespread expectation that the Fed will not begin ‘tapering’ this week – is there increased scope for more RBA cut (or cuts) in the near future then?
