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According to analysts at TD Securities, the RBA Minutes/Governor speech surprised no-one with a dovish tilt via two triggers for a rate cut (1) spare capacity in the labour market; and (2) sluggish consumer spending.

Key Quotes

“While we don’t think last week’s labour market report was as dire as some claimed, and we see consumers spending the upcoming tax cuts under a Coalition government, the RBA all-but admitted that they should have cut on 7 May.”

“June is fully priced for a cut, and unlike the surprise pause in May, it seems that a June cut is more likely. A second cut is also priced – and was embedded in the SoMP forecasts – it is just down to timing. So we look for a June cut and leave August as the next timing for now, for a terminal rate of 1%.”