Morning Report Thursday 23 July 2015
This morning at 7am, New Zealand’s RBNZ cut interest rates to 3% from 3.25% and importantly stated that further easing seems likely, citing further weakness in the NZD as necessary. This rhetoric is incredibly close to that of our own RBA and one of the reasons why at MarketMatters, we believe Australian interest rates will again be cut from 2% to at least 1.75%. Countries who are strongly influenced by commdities are hurting badly, Canada who recently also cut interest rates is now technically in recession as it suffers specifically from a plunging oil price. While Canada is more dependant on oil and North America, compared to Australia with Iron Ore/Coal and China, the strong implication is the cash rate is likely to stay low or go lower in Australia.
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