RBA cash rate to be held at 1.5% through 2017 - Westpac
|RBA governor Lowe helped consolidate the drift higher in yields with his upbeat comments: “(W)e are in a better position than we have been for some time,” notes Sean Callow, Research Analyst at Westpac. Westpac continues to expect the cash rate to be held at 1.5% through 2017 and 2018 but near term, markets may settle down into toying with rate hike risks in H1 2018, helping support AUD on dips.
Key Quotes
“Prices of Australia’s key commodities are also showing signs of at least stabilizing. Spot iron ore remains sub-$60/tonne but has risen for 6 straight sessions. Our daily commodity price index (WCFIAECI on Bloomberg) is about flat so far in June after a startling -13.8% in May. Oil prices are less helpful though, if the declines are sustained and thus drag on LNG prices.”
“Spec positioning is about neutral, Dollar Index shouldn’t move too far and the local calendar is empty, all suggesting a neutral bias on the week. Look for AUD/USD 0.7500-0.7650 to contain trade.”
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