Reserve Bank of Australia Statement on Monetary Policy, November 2015 edition
- Says prospects for economy have firmed a little
- Subdued inflation outlook may afford scope to ease further if needed
- Cuts near term inflation forecasts by 0.5%, shaves longer term GDP forecasts
- Sees underlying inflation around 2% for most of next year, before rising to 2.5%
- Underlying inflation forecast 1.5-2.5%by mid-2016, then 2-3% out to end 2017
- GDP growth forecast at 2.25% end 2015, 2.5-3.5% end 2016, 3-4% end 2017
- GDP revisions for 2017 reflect slower start up of LNG projects
- Economic growth appears to have picked up in Q3 thanks to exports, home building
- Employment growth forecast to remain relatively strong, jobless rate to hold steady
- Sees unemployment between 6-6.25% over next year, then falling gradually
- Data suggest pick up in non-mining investment unlikely in the near term
- Lower AUD has boosted net service exports, makes no comment on level of AUD
- Tighter supervision helping contain risk from housing market
- Asia slowdown to be more persistent than expected, key uncertainty for forecasts
Quick Headlines via Reuters
Full Text: Statement on Monetary Policy
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As expected, we've got lower inflation and GDP forecasts. We had a little short squeeze in the AUD/USD ahead of the release and its back into the range where it spent most of the morning now
The bank is also a little more upbeat on the near term for the economy
The combination of lower inflation forecasts along with the expectation for unemployment to fall gradually indicates, to me, that despite the RBA getting a little more upbeat on the economy there is certainly scope to lower the cash rate further (indeed they've said as much ... "if needed" .... but if inflation is falling and unemployment is only coming down gradually, why not cut again? I can't see it happening prior to the new year, though .... which effectively means February at the earliest .... and at this stage I'm not betting on that.)
more to come
