RBA to remain on hold, 1st rate hike mid-17 – NAB

By FXStreet FXStreet (Bali) – NAB expects the RBA to remain on hold for an extended period, although they have pushed out the timing of the first interest rate hike until mid-17.

Key Quotes

“We remain cautiously optimistic that the gradual recovery in the non-mining sector is gaining traction. Recent outcomes from the business survey support this contention, while the unemployment rate is also holding steady.”

“The RBA has so far refrained from easing policy further despite some tightening of financial conditions. Low inflation however does provide room for the RBA to ease, although this would require evidence that local demand conditions are deteriorating again.”

“As such the RBA is expected to remain on hold for an extended period, although we have pushed out the timing of the first hike until mid-17.”

“Real GDP is forecast to expand by 2.6% in 2015/16 and 3.0% in 2016/17, with El Niño only subtracting marginally. The unemployment rate eases gradually but remains elevated for an extended period.”
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Source:: FX Street