According to analysts at ANZ, all eyes will be on RBA communication in the week ahead as Assistant Governor (Financial Markets) Kent will be focused on largely technical matters to do with the Committed Liquidity Facility (CLF).
Key Quotes
“The real focus will be on the RBA Governor’s speech at the Anika Foundation luncheon. The current and previous RBA Governors are strong supporters of the Foundation, and the speeches delivered at the annual luncheon have been important events. It seems reasonable to expect a similar approach.”
“The Governor may pick up some of the themes in the RBA’s recent Research Discussion Paper: Cost-benefit Analysis of Leaning Against the Wind.”
“The focus should be on the inflation objective. Of course, other considerations such as the signal being sent by a series of rapid rate cuts might still be relevant. The employment data for June did not advance the case for a follow-up cut in August. It does, however, leave the RBA with higher unemployment than it expected in May.”
“We think the core CPI for the June quarter will be a downward surprise, adding to the picture of a worse starting point for the August forecast update. The cash rate is going lower at some point and will stay low, implying negative real interest rates for an extended period.”
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