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RBA rate cuts still just around corner; RBNZ hike kept at bay
In this Asia Focus Video Andrew Robinson, Correspondent for Saxo Capital Markets in Singapore analyses recent macro-economic data from Down Under and assesses whether an interest rate cut is soon expected from the Reserve Bank of Australia. He also touches on the inflation and rate outlook in New Zealand.
Australia’s December employment report which greatly missed estimates initially shocked and the knee-jerk market reaction was to sell AUDUSD but the Aussie dollar is expected to recover fairly quickly. Closer analysis revealed most losses in the part-time jobs sector and strong growth in full-time jobs which is the preferred scenario and it will be interesting to see if this continues, says Andrew.
Meanwhile, the demand for home loans in Australia increased for the fifth straight month in November while building approvals are still relatively sluggish. Consumer sentiment as such is still suffering says Andrew and it will be some time before the effect of end of year interest rate cuts by the Reserve Bank of Australia can really be felt by Australians. More rate cuts in the vicinity of 100 basis points during the next 12 months are still priced in and the expectation for another move at the RBA’s February meeting is high.
Also on rate outlooks the latest consumer price index data from New Zealand suggests a benign inflationary environment, thereby pushing back the chance for rate hikes, adds Andrew.
See more of Andrew's Asian market commentary on TradingFloor.com
05:52 minutes
Tags: andrew robinson, australia, consumer confidence, cpi, employment, home loans, housing, inflation, newzealand, rates, rba, rbnz, reutersforex