During the Asian session, we will expect RBA's decision on the base rate. Here are Bank of America Merrill Lynch's expectations for the bank's decision.
"We expect the RBA to keep its current base rate unchanged at 1% after the RBA lowered it in June and July. Although slightly rising, Q2 inflation is moving as expected by the central bank, so it is unlikely that the bank will take a third. cut in the short term. The inflation target is flexible, fiscal stimulus approaches, lending conditions are eased, and the AUD weakens. The bank expects another cut in November after the bank has better assessed inflation and economic growth. "
In contrast to Australia, BAML are also focusing on New Zealand and RBNZ's upcoming interest rate decision on Wednesday.
"Unlike their neighbors, we think that RBNZ will cut interest rates on Wednesday, followed by another reduction in November. Given the worsening geopolitical situation and the risk of a long-term contraction in the gross product. The bank is thought to reduce interest rates to 0.75. This is still estimated at the NZD exchange rate.Recent economic data also suggest interest cuts and business sentiment remains at recessionary levels.RBNZ has lower expectations for inflation and the job market, and you will have to reduce interest rates. "
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