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In a statement released to investors, AMP Capital chief economist Shane Oliver said the tone of the RBA’s August Statement on Monetary Policy was “actually quite dovish”, cautioning that the Bank’s comments suggested a continuing easing bias.
If the current economic environment does not change, Mr Oliver said, another cut to the Australian cash rate is likely.
“If September quarter inflation rate remains very low as we expect and the Fed remains in ultra-gradual mode regarding rate hikes as we also expect, then the RBA will cut again in November,” he said.
In addition, Australian economic data released this week “presented a mixed picture”, Mr Oliver said, with the trade deficit worsening and retail sales down, but new home sales remaining high and the purchasing manager’s index for the manufacturing and service sectors “well above those seen in major developed countries”.
Mr Oliver did, however, add that a NAB business survey, to be released on Tuesday 9 August, is likely to show business conditions and confidence holding up, and consumer confidence data (to be released on 10 August) expected to “bounce back a bit” off the back of the cash rate cut.
[Related: Non-majors reduce variable rates]