RBA will remain firmly on hold
FXBAZOOKA.com - Australian economic growth has slowed in Q2, but came a bit above expectations. The biggest contributor to growth remains the mining sector, accounting for around 1.2% of GDP. A rebound in inventories helped to support the overall figure.
The comments of the Reserve Bank of Australia’s Governor Stevens made Aussie rise. Stevens said that further cuts in the interest rates are unlikely and that there are signs that growth continuing in the current quarter. While this is hardly news for the market, this may liquidate the remaining doves calling for lower interest rates.
RBC: “Q3 is looking slightly better but it’s not going to be enough to get back to above trend growth any time soon. We see the RBA for the foreseeable future.”
ANZ: “We don’t think the RBA will be swayed from its on-hold stance, with the gradual nature of the recovery unlikely to generate significant improvement in the unemployment rate for some time.”