FXStreet (Bali) - Following the decision by the RBA to keep interest rates unchanged at 2%, HSBC notes that a cut is on the table in coming months.
Key Quotes
"The RBA left its cash rate on hold today at 2.00%, in line with the market expectation (HSBC expected a cut). The RBA seems convinced that there will be sufficient momentum in the local economy to keep inflation on target, despite the significant downside surprise in the Q3 CPI numbers."
"The post-meeting statement noted that 'inflation is forecast to be consistent with the target over the next one to two years, but a little lower than earlier expected'."
"At the same time, the RBA pointed to the recent lift in timely indicators, such as the NAB survey of business conditions and employment growth."
"The RBA's quarterly official statement, which is due to be published on Friday (6 November), will provide an update on the central bank's growth, inflation and unemployment rate forecasts."
"Much like the RBA, we are optimistic on growth, but given the low starting point for underlying inflation we think the RBA may struggle to keep inflation on target without extra stimulus. A cut is on the table in coming months."
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