BTIM expect domestic interest rates to fall by 50 basis points in the first half of CY15

BTIM expect domestic interest rates to fall by 50 basis points in the first half of CY15. Vimal Gor, Head of Income and Fixed Interest at BTIM, has put a spotlight on RBA jawboning. The RBA is trying to talk the Aussie dollar down to stimulate growth. Ultimately, their view is that the dollar is overvalued - that may or may not be correct. If they want to get the Aussie dollar down they can do it - they just have to cut interest rates. So it's up to them and we question and what point does not moving rates turn into benign neglect on the economy. Gor says that commodity prices remain the swing factor when it comes to rates and with the terms of trade remaining weak and iron ore prices still falling he says it will be hard to see consumption picking up. I remain of the view Australia has more interest rate cuts to come. I expect at least 50 basis points sometime in the first half of next year. (VIEW LINK) @btim


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