An overnight note from UBS with some comments on the Reserve Bank of Australia.
ICYMI yesterday the bank left the cash rate unchanged, again. It was a 50/50 toss up going in whether they'd cut and they didn't. They were expected to shift to an easing bias if they didn;lt cut, and well, they really didn't do so explicitly.
I reckon the signs are there that they will cut ahead, but the fact is they did not shift their rhetoric to say so.
UBS says pretty much the same:
- RBA … moved to an implicit easing bias. The easing bias is them noting that there is spare capacity and that a further decline of the unemployment rate is likely to be required to hit their inflation target.
- concluded saying that they will closely watch the labour market at coming meetings
UBS … doesn't think their forecasts for GDP and inflation are plausible - they seem way too bullish
The bank now forecasting an August rate cut.
