HSBC – Further RBA rate cuts ‘unlikely’

HSBC’s senior economist Paul Bloxham:

• Says that while falling commodity prices are dragging on Australia’s income growth, its being offset by an increase in output volumes by miners
• “We remain of the view that further rate cuts are unlikely
• The RBA already views monetary policy as accommodative and there are clear signs that very low interest rates are working to support a rebalancing of Australia’s growth, with housing market activity rising and non-mining business conditions improving in recent months
• We expect that the RBA’s easing phase is done. Our central case sees a hike in mid-2015, although we see a clear risk that the RBA may be on hold for longer than this.”

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More:

• Barclays push back their expectation for the RBA to hike rates
• Deutsche Bank tipping two rate cuts from the RBA in 2015
• The RBA made its case for a lower Australian dollar more forcefully today