The latest MIN of survey of who is expecting what from the RBA at their monetary policy meeting on May 5 have 18 economists/analysts (of 20) expecting a rate cut
2 of those surveyed expect a holding decision
The 2 banks not expecting a cut are NAB and Macqaurie.
In brief ...
NAB cite retail sales, dwelling investment, and business conditions all showing signs of improvement, evidence that "prior rates cuts are continuing to gain some traction" (and, on the other hand... also recognise that "notwithstanding the welcome uptick in the iron ore price through April, commodity prices have fallen further over the past quarter which will intensify downward pressure on the mining sector and national income in the year ahead. Also, business confidence remains relatively subdued"
- Say the bank will hold but signal preparaedness to cut again if "that would sustainably lift economic growth. If the unemployment rate resumes its rise, as we expect, they will need to act on this easing bias and we have tentatively put a final 25bps cut to 2% into August. Exact timing will be determined by the incoming data. It's also possible that we continue to be pleasantly surprised by the economy which would allow the RBA to hold the cash rate at 2.25%.
And, Macquarie (senior economist James McIntyre):
- Rates are still headed lower, just later
- After the March RBA board meeting we shifted our forecast rate cut out to August, and added a second rate cut in November
