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3 Dec 2014
RBA to hike rates by 75bp in 2015 - Standard Chartered
FXStreet (Bali) - The RBA is likely to maintain its current accommodative policy stance, but without easing further, notes Chidu Narayanan, Macro Research Analyst at Standard Chartered, adding that by the end of 2015, 75bp worth of rate hikes are expected.
Key Quotes
"We expect the RBA to keep rates on hold in H1-2015. We maintain our view that the central bank is at the end of its easing cycle, and expect the next move to be a rate hike."
"We forecast a 25bps hike in Q3-2015, followed by two hikes of 25bps each in Q4-2015, taking the cash rate to 3.25% by end-2015."
"While the governor and other RBA members have said they do not rule out intervention, we believe the barrier to intervention in the FX markets is quite high. We expect the RBA to continue to intervene verbally to push down the Australian dollar (AUD)."
"Narrowing interest rate differentials, declining commodity prices and weaker growth in China are likely to weigh on the AUD. Although we do not expect further RBA easing, we are likely to see more attempts to talk down the currency. We maintain our Underweight short- and medium-term FX weighting on the AUD against the US dollar (USD)."
Key Quotes
"We expect the RBA to keep rates on hold in H1-2015. We maintain our view that the central bank is at the end of its easing cycle, and expect the next move to be a rate hike."
"We forecast a 25bps hike in Q3-2015, followed by two hikes of 25bps each in Q4-2015, taking the cash rate to 3.25% by end-2015."
"While the governor and other RBA members have said they do not rule out intervention, we believe the barrier to intervention in the FX markets is quite high. We expect the RBA to continue to intervene verbally to push down the Australian dollar (AUD)."
"Narrowing interest rate differentials, declining commodity prices and weaker growth in China are likely to weigh on the AUD. Although we do not expect further RBA easing, we are likely to see more attempts to talk down the currency. We maintain our Underweight short- and medium-term FX weighting on the AUD against the US dollar (USD)."