Westpac says the case 'indisputable' for an RBA rate cut … but not in May

While forecasts abound for a May 7 Reserve Bank of Australia rate cut:

• ICYMI - AUD drop after CPI, forecasts for an imminent RBA rate cut piling in.

A few analysts say no. HSBC is one of them (see the link above). Westpac also, a note today reiterating their view that the cut will come, but not until August:

• "below trend" forecast for growth in 2020
• "At trend growth" in 2019 is not sufficient to trigger a rate cut immediately
• but … by August, when the next set of growth revisions would be made, the growth forecasts would need to be lowered further (to 2.5% in 2019 and 2.25% in 2020).
• With underlying inflation persistently below the bottom of the 2-3% target band; growth forecast below trend and in conjunction with an existing explicit easing bias the case for a rate cut would be indisputable.

Westpac have been calling August and November for RBA cuts since late February. For the upcoming meeting:

• we anticipate that the RBA Board will adopt a clear easing bias at the May meeting