RBA Lowe: Aussie economy needs stimulus

Philip Lowe, the governor of the Reserve Bank of Australia, is giving a speech on “From Recovery to Expansion” at the Australian Farm Institute Conference in Toowoomba, Queensland.

Key comments

Says premature to be considering ceasing bond purchases.
Says bond buying has lowered funding costs across economy, contributed to lower A$.
Options include another A$100 bln programme, scaling back or spreading out purchases.
Says on 3-year yield target, board has considered range of possible scenarios.
In some scenarios conditions for 2024 rate rise could be met, in others not.
Central issue is the probability of cash rate increasing over 3-year window.
Board wants to see recent recovery transition into strong and durable economic growth16-Jun.
Says economy still in recovery phase, some way to go yet.
Says inflation pressures remain subdued and are likely to remain so.
Says wages growth subdued as firms focus on curbing costs.
Many firms relying on non-wage strategies to retain, attract staff.
Whether households spend their built up savings a major uncertainty.
Says watching build up of household debt, bank lending standards.
Says recent pick-up in business investment is welcome, but fair way to go.

AUD is unchanged so far.

The impact of his words were unlikely to move markets considering the ranges seen overnight due to the Federal Reserve's hawkish surprise and ahead of Australia’s May jobs report that is due at 11:30am Syd/9:30am Sing.

AUD/USD extends Fed-led slump to two-month low near 0.7600

With respect to the jobs data, analysts at Westpac agree with the median forecast for employment to have risen by 30k.

''However, we expect the unemployment rate rose from 5.5% to 5.7% (market consensus is 5.5%) due to a rebound in participation (66.3% versus 66.0% in April).''

About Lowe

Philip Lowe replaced Glenn Stevens as governor of Australia’s central bank. Lowe was the Deputy Governor of the Reserve Bank of Australia, a position he held since February 2012.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.