Westpac were forecasting no change in the RBA cash rate out to end 2019

Have extended that now

  • Our view is that the cash rate is likely to remain on hold not only through 2018 and 2019 but also 2020.

Westpac citing tightening financial conditions quite apart from efforts by the RBA, pushing RBA hikes out further :

  • Some may argue that we are unrealistically forecasting that Australia will completely miss the global rate hike cycle if rates remain on hold for such an extended period.
  • We ... arguing that financial conditions are affected by more forces than just the RBA cash rate.
  • Through 2017 and 2018 we are already observing tightening conditions in the absence of RBA rate hikes.
  • This tightening is emanating from heightened macroprudential policies from the banking regulator APRA and the rise in wholesale funding costs for banks and corporates.