RBA to now cut rates by 25bps in October after labor force data - CBA

Commonwealth Bank of Australia (CBA) brought forward its call for a Reserve Bank of Australia (RBA) rate cut to October meeting following disappointing Australian employment data.

Key Quotes:

“Expect RBA to cut the cash rate by 25 bps at Oct meeting after labor force data (the previous call was for November).

Jobs data a 'smoking gun that will force the RBA's hand.

Policymakers desire to see labor market slack recede.

Evidence in data of slack increasing - this trumps the rate of employment growth.

RBA stated 4.5% unemployment is needed to boost wage growth to in turn lift inflation into target band.”