Easing to come
Bill Evans of Westpac has called further monetary easing, expecting interest rates to fall from 0.25 per cent to 0.10 per cent.
Economists from at least five other major institutions had joined the chorus by the end of the week, and there may be more to follow.
Any such move may well involve reducing the target for the 3-year yield, being a key funding benchmark for Australia, and the rate charged to lenders for accessing the Term Funding Facility.
The upcoming Monetary Policy Decision falls due at 2.30pm AEST on Tuesday October 6.
Financial markets aren't totally convinced, but the 3-year bond yield has certainly made a noteworthy move in that direction since the beginning of last week.
The RBA's Debelle has posited that a further cut in target rates is one of the four potential options for the central bank to pursue, given that the outlook for inflation and employment isn't presently consistent with the Bank's objectives.
And two of those options have seemingly been dismissed as unworkable, and one the Bank seems to be lukewarm on at best (i.e. buying further bond maturities).
Which by default appears to leave a further cut in the interest rate target as the most likely option.
The Federal Budget for 2020-21 is also due for release on October 6, which may or may not serve to factor into the timing of further easing being announced.
