Friday , 22 November 2024
Home Forex AUD: CBA maintains base case December RBA 25bp rate cut – see firmer disinflationary pulse
Forex

AUD: CBA maintains base case December RBA 25bp rate cut – see firmer disinflationary pulse

A detailed note from Commonwealth Bank of Australia on what they expect from the RBA.

In summary:

  • Our base case sees the RBA commence normalising the cash rate by the end of 2024 (we have pencilled in December for the first 25bp interest rate cut)
  • A firmer disinflationary pulse than the RBA anticipates is a necessary condition for the Board to ease policy this calendar year.
  • The already released September quarter consumer prices data in a raft of surveys gives us greater confidence that the much desired disinflationary process has recently gathered momentum.
  • But it will be up to the Q3 24 CPI, due to be released on 30 October, to confirm that our assessment of the current pace of inflation is the correct one.
  • The RBA Board will be more willing to commence normalising the cash rate if inflation proves less persistent than previously assumed.

CBA take a detailed look at 7 inflation indicators. Like I said, its detailed, but in very, very brief:

  • Melbourne Institute Inflation Gauge has dropped sharply
  • NAB final prices measure eased further in September
  • Output prices in the S&P/Judo PMI back to their pre – pandemic run rate in September
  • Advertised rental growth has dropped sharply
  • ABS monthly CPI indicator posted a welcome drop in August
  • CBA internal wages model has turned down
  • Consumer inflation expectations are also trending lower

****

AUD update, it opened lower after the info from China over the weekend was disappointing, and it hasn’t really bounced yet:

This article was written by Eamonn Sheridan at www.forexlive.com.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Russia deputy prime minister says oil market is balanced thanks to OPEC+

Novak had graduated from being Russia's energy minister to deputy prime minister...

EURUSD Technical Analysis – The Euro falls to the lowest level since 2022

Fundamental OverviewOverall, we’ve seen a rangebound price action in the US Dollar...

USDCHF Technical Analysis – The USD gets a bid on weak Eurozone PMIs

Fundamental OverviewOverall, we’ve seen a rangebound price action in the US Dollar...

US Dollar surges to two-year high as Eurozone PMIs disappoint

The US Dollar (USD) jumps on Friday to its highest level in...