RBA to cut rates by 1% in next 9 months: Deutsche Bank

Just reading a research piece by Deutsche Bank in which they say that the RBA will bring the cash rate down to 2.5% by mid-2013. Slumping Chinese steel prices and lowered growth forecasts for the Chinese economy are the main reasons behind their analysis. Easier policy by the Fed and the BOJ will also undoubtedly help tip the RBA’s hand. DB says that the RBA will cut by 50bps this year and by another 50bps in H1 of 2013.

Most local Australian banks also agree that the RBA will cut by 50bps this year, though there is plenty of disagreement whether these cuts will start in October or not.

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