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13 Mar 2014
Flash: Bar very high for a further RBA cut - RBS
FXStreet (Bali) - Greg Gibbs, FX Strategist at RBS, defines the current AUD environment as a battle ground for a recovery in Australian domestic activity and higher financial risks in China, adding that the bar has been set very high for the RBA to cut rates again.
Key Quotes
"The Australian employment report was stronger than expected in Feb. This is largely a pay-back for accelerated weakness in recent months that looked out of place against improved economic activity in Q4; including further acceleration in housing indicators and recovery from below trend to near trend activity in most other surveys of business activity. It would be wrong to conclude that this is a turn in the weakening trend in the labour market, but it suggests the rise in unemployment remains gradual and the jobs market was better balanced in recent months."
"The RBA should remain firmly on hold, although with the housing market pointing to a rapid rise in residential building over the coming year, the bar is very high for a further rate cut."
Key Quotes
"The Australian employment report was stronger than expected in Feb. This is largely a pay-back for accelerated weakness in recent months that looked out of place against improved economic activity in Q4; including further acceleration in housing indicators and recovery from below trend to near trend activity in most other surveys of business activity. It would be wrong to conclude that this is a turn in the weakening trend in the labour market, but it suggests the rise in unemployment remains gradual and the jobs market was better balanced in recent months."
"The RBA should remain firmly on hold, although with the housing market pointing to a rapid rise in residential building over the coming year, the bar is very high for a further rate cut."