Gentle easing ahead
It seems to be fairly unanimously agreed that the Reserve Bank will announce a cut in the cash rate target from 3.85 per cent to 3.60 per cent at the monetary policy decision on Tuesday.
What happens after that is far less certain.
Market pricing currently sees a terminal cash rate of around 3 per cent.
Source: ASX
Market economists, on the hand, seem a bit more hawkish, according to the latest surveys.
Source: Sean Callow, X
Since 2023, jobs growth in the Aussie economy has been overwhelmingly kept afloat by non-market and government-aligned roles, but this trend seems to be running out of steam, and the unemployment rate is rising.
That said, when looking across all of the data sets I post about monthly on this blog, many of them appear to be improving, incorporating a fair range of economic data.
For this reason, a somewhat hawkish tone might be expected in this week's press conference, with the central bank in quite an enviable position now to adopt a "wait and see" mentality.
Stock markets tend to be a leading indicator, and appear to have been pricing in some interest rate cuts, the ASX 200 finish today's trade at a record close of 8,844 points.
Property markets have also been steadily strengthening, somewhat buoyed by reports that there will be no changes pursued for negative gearing.
Given that the Labor party looks set for at least another half-decade in government, this news will be relief to landlords.
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