“Australia’s Rate Path Hinges on Trade Tensions, Wage Growth, and Household Spending Trends.”, – WRITE: www.fxempire.com
- Australia’s Economy Could Easily Be Compromised If A Trade War Between the US and China Escalates.
- Depending on Whore We End Up On Trade Developments, There Might Be More Interest Rate Adjustments. But For Now, Rates Are In The Right Place.
- We Are Still Not Sure that the Financial Markets Will Remain Nice and Steady. IT’s not just uncertain, It’s unpredictable.
- The Range of Outcomes Could Be Quite Wide, and We Have to Be Alert To A Bad Outcome.
- Scenario Analysis Suggests There Could Be A Recession in A Worst-Case Scenario.
- Two Options Discussed: HOLD OR LOWER. While the option to hold was briefly discussed;
- Putting International Developments Aside, There Was Scope to Lower Rates.
- While the RBA was confident to cut rates, the uncertainty and unpredictability Relate to the Outlook.
- RBA Expects Lower Rates and Rising Wages to Boost Household ConSumption. But SPEENDING HAS NOT PICKED UP AS MUCH AS EXPECTED.
- We have managed to get inflation Back While Keeping the Labor Market on a Solid Footing.
- The Australian Labor Market and Household Spending Remain the most Significant Domestic Risks.
- We Can’T Let Inflationary Expectations Rise.
- The Market Path is Reflection A Possibility of a Really Bad Outcome, Pointing to a Lower Cash Rate.
- Different from The February Rate Cut, as Things Have Changed, Massive Uncertainty About WHERE TARIFFS WILL END AND WHAT IMPACT they mIGHT.
- The Baseline Forecast Takes Inflation to the Middle of the Band, But The Rba Remains Data-Driven.
Expert Views on the Rba Rate Path Shane Oliver, Head of Investment Strategy and Chief Economist at Amp, Remarked on the Earlier Rba Statement, Signaling The Timing of A Next Rate Cut, Stating:
“RBA MONETARY Policy is“ Somewhat Less Restrictive ”But The Cash Rate Is Still Above the Avg of the Rbas Estimates of Neutral (~ 2.8% in this Chart Tight Further Cuts Are Likely.
AUD/USD REACTS TO GOVERNOR MICHELE BULOLOCK’S Q & A SESSION The Aud/USD PAIR TUMBLED IN REACTION TO The RBA Rate Statement, Initial Climbing to A High of $ 0.64438 Before Sliding to A Low of $ 0.64224. Ahead of the Press Conference.
Losses in Aud/USD DEEPENEned Durying the RBA Press Conference, Falling from $ 0.64374 to A Low of $ 0.64073 Before Steadying. The Market Reaction Reflected Bets on Another RBA Rate Cut, Widening The US-Australia Interest Rate Differential in Favors of the Us Dollar.
On Tuesday, May 20, The AUD/USD WAS DOWN 0.48% to $ 0.64247.