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RBA ease 25pts as expected

Written by Sam Coxhead on December 4th, 2012.      0 comments

5:23 PM (NZT) The RBA just eased the cash rate to 3.00% in line with market expectations.
The tone of the accompanying statement could be viewed as not quite as dovish as expected. They again comment that they are back at a wait and see position whilst the effects from the previous easing’s work their way into the real economy.
The AUD has seen a small rise in demand following the announcement, and this can simply be attributed to a “buy the rumour, sell the fact” scenario. Australian retail sales and building approval’s numbers have been weaker than expected so far this week. Third quarter GDP numbers are due tomorrow and these come ahead of employment numbers on Friday.
So the intense focus will remain and the wider market concerns about the US fiscal position remain in place. Europe seems to have hit calm waters for the time being, but no doubt this will not last much into the new year, if that long at all.
The RBNZ meeting on Thursday provides another opportunity for insight into new RBNZ Governor Wheeler. Some pundits see increasing chances of further policy accommodation from the RBNZ, but that seems very unlikely to my mind.