Commonwealth Bank of Australia (CBA) brought forward its call for a Reserve Bank of Australia (RBA) rate cut to October meeting following disappointing Australian employment data.
Key Quotes:
“Expect RBA to cut the cash rate by 25 bps at Oct meeting after labor force data (the previous call was for November).
Jobs data a ‘smoking gun that will force the RBA’s hand.
Policymakers desire to see labor market slack recede.
Evidence in data of slack increasing – this trumps the rate of employment growth.
RBA stated 4.5% unemployment is needed to boost wage growth to in turn lift inflation into target band.”
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