Further rate cuts no saviour for domestic cyclicals

Further rate cuts no saviour for domestic cyclicals. Although still in its infancy, 2015 has so far been a frenetic one for central banks around the world, in what has been a series of synchronised (but not co-ordinated) monetary easings. Central banks in Switzerland, Denmark, Turkey, Canada and Peru have cut their official interest rates in recent weeks, and at the time of writing, the ECB is expected to extend and expand its program of quantitative easing at its meeting on January 22nd. In this post, I discuss the implications of the Bank of Canada's recent decision to ease for the RBA's policy deliberations, suggest that the RBA should reduce the cash rate to 2% by June and undertake a quantitative analysis of previous easing cycles which suggests that domestic cyclicals are unlikely to benefit from rate cuts. Click here for the full blog post: (VIEW LINK) @salvatoreferraro


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