RBA to hold rates in February, next cut seen in April – Reuters poll

The latest Reuters poll of 32 economists showed that a majority of them expect the Reserve Bank of Australia (RBA) to leave its Official Cash Rate (OCR) unchanged at 0.75% next Tuesday.

Key Findings:

“Most economists pushed back their prediction to April, from February, just last week after better-than-expected employment data for December.

As many as 23 of 32, or nearly 72%, forecast rates at 0.5% before June with three predicting deeper cuts to 0.25%.

A median of 29 respondents expects the cash rate will remain at 0.5% through end-2020 and then ease to 0.25% by early next year.

Economists’ predictions align with market pricing which shows little chance of a move in February. Futures are predicting a 60% chance of a cut to 0.50% in April. 

Analysts expect small downgrades for near-term growth due to the impact from bushfires and a rapidly spreading coronavirus that has left parts of China in a lockdown. China is Australia’s largest trading partner.”