Goldman with the view.
The Australian Dollar has been the worst performer in the G10 over the past week, weakening by a little over 2% versus the Dollar.
Australia’s macroeconomic backdrop has “caught down” in recent months.
We do not think that Australian macroeconomic conditions are that different compared to the majority of its G10 peers, most of which have already started to normalize policy.
Following the softer Q3 growth data, and headline inflation that is now within the RBA’s target range, we think the Bank is likely to adopt a more dovish tone at next week’s board meeting.
We expect the RBA to cut by25bps in February, but rates markets have only cumulatively priced a full cut by the April meeting.
Between now and February, we think expectations can shift towards earlier easing and a more dovish RBA.
I agree. Especially after more energy rebates are announced with MTEFO, pushing out any upwards correction of bills into the never, never.
