A note this week from National Australia Bank shifting forward their projection for the RBA:
We have brought forward our expectations for the timing of rate cuts, now seeing a first cut in February 2025 (previously May)we continue to see a gradual pace of cuts back to 3.10% by early 2026
Main points from the note, in summary:
Nov/Dec cuts ruled out despite GDP growth near 1.0% y/yCapacity utilization remains elevatedInflation risks prompt delay in first cut timingQ3 CPI expected at 0.8% q/q (3.5% y/y) trimmed meanLabor market holding stronger than expected; unemployment to stabilize ~4.5%
RBA seen engineering soft landing with gradual normalization as inflation subsides while maintaining full employment. Labor market resilience and above-target inflation warrant cautious approach despite slowing growth.
NAB highlight the next key event as Q3, due October 30 – will be impacted by subsidy effects but the detail should show steady progress on inflation.
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The Reserve Bank of Australia meet on November 4 and 5, then December 9 and 10.
Meetings next year for the RBA
This article was written by Eamonn Sheridan at www.forexlive.com.
