RBA cut the cash rate by 25bps to a record low of 1.50% - TDS

Research Team at TDS, notes that the RBA cut the cash rate by 25bps to a record low of 1.50%, taking yields to record lows across the curve.

Key Quotes

“The Bank’s view that the cut in rates would not fuel housing market risks made the decision to cut easier with the impetus to cut driven low inflation outcomes. Largest retail bank CBA has announced a cut in the variable mortgage rate, but has not passed it on in full, only 13bps. Full report appears here.

The Trade Balance for June recorded a much larger than anticipated Trade Deficit of A$3.2b vs a A$2b forecast deficit. So while the headline was bad, it was a good story, underscoring that demand is firm—consumption goods +7% and capital goods +3%.

Building Approvals dropped 2.9% in June. The weaker headline this time was due to a drop in approvals for houses, -2.3%.”