The RBA is clearly a reluctant cutter given the recent trend in house prices

I remain of the view that an additional easing is needed given the clear resilience of the Australian dollar and the fact that housing is going to add little to growth from here on, due to capacity constraints in the construction sector (including workers, supplies and local government regulation), with infrastructure spending also likely to provide little support to the local economy for the same reason. Nevertheless, the timing of any future cuts is data dependent, but I think the RBA does not have the policy arsenal to get the Australian currency in the low 70 US cents range – that can only be delivered by the US Fed when it commences its tightening cycle at the end of this year. Until it is hard to identify how Australian growth can materially improve from here. With valuations stretched and 2015 earnings growth downgraded to about 0%, it is hard to see how the market can hold onto current levels, unless growth and earnings expectations miraculously improve. (Matt Sherwood)