Not much to change the RBA’s perspective on the cash rate | Liverpool City Champion
Reserve Bank of Australia Governor Philip Lowe will have the opportunity to provide an update on the economic outlook after the central bank board meeting on Tuesday, but there is no reason to s ‘expect policy changes.
There has been little data since the board met a month ago to change the RBA’s expectations that the cash rate will not be raised from an all-time high of 0.1% before 2024.
In the words of AMP Capital chief economist Shane Oliver, the meeting “might be pretty boring.”
The most recent employment figures showed a sharp loss of jobs due to COVID-19 lockdowns in NSW, Victoria and ACT, while retail spending has now fallen for three consecutive months, a key element of Economic Growth.
Dr Lowe has previously estimated that the impact of confining half of the country’s population will see the economy contract by at least 2% in the September quarter and the unemployment rate will hit “high fives” in September. over the next few months.
However, the news on vaccination rates has been overwhelmingly positive and states have announced their ways out of lockdown when double-dose jabs hit 70 and 80 percent.
He suggests that the economic recovery will resume in the December quarter.
Economists will look for clues in Dr Lowe’s statement after the meeting on when restrictions on home loans could be introduced to ease some of the heat in the Australian housing market.
The Board of Financial Regulators, of which the RBA is a member, warned last week that while lending standards have not come down so far, they are considering policies to curb activity before indebted households become a risk to the economy.
On the data front, ANZ will release its latest monthly job vacancies report on Tuesday, a gauge of future job growth.
The Australian Bureau of Statistics will also release its weekly paid employment data for the period up to September 11 on Thursday, a series that already points to a further substantial drop in employment in the labor force report due later this this month.
In addition, ABS will publish the international trade figures for the month of August on Tuesday.
Economists are forecasting a smaller trade surplus of $ 10 billion, narrowing from a record high of $ 12.1 billion in July.
This probably reflects the impact of a sharp 25% drop in the price of iron ore.
Meanwhile, Australian stocks are expected to have a positive start to the week, although trading is likely to be light with holidays in New South Wales, South Australia and ACT for Labor Day and Queensland for the queen’s birthday.
Australian equity futures were 52 points, or 0.73%, higher at 7,180.
The firm tone was prompted by investors entering the last quarter of the year amid a buying mood on Wall Street, boosted by progress in the fight against the coronavirus and the news that US President Joe Biden is was more involved in the negotiations on the bill on infrastructure spending.
The Dow Jones Industrial Average rose 482.54 points, or 1.43%, to 34,326.46, the S&P 500 gained 49.5 points, or 1.15%, to 4,357.04 and the Nasdaq Composite added 118.12 points, or 0.82%, to 14,566.70.
The Australian benchmark S & P / ASX200 on Friday closed 146.7 points, or 2%, lower at 7185.5, ending a fourth week of decline.
Associated Australian Press