Summary: After the RBA’s most recent rate cut yesterday, I suspect the best bet for investors is to continue to expect further easing, but this will ultimately depend on the US Federal Reserve. An unusual feature of the RBA’s statement is that it was upbeat on the economy in trying to justify a cut, noting improved trends in household demand. In terms of the market, the RBA’s ultra-low rate is likely to underpin valuations.
Key take-out: The RBA’s cut yesterday means the hunt for yield is alive and well and will remain a feature of the investment landscape for the foreseeable future.
Key beneficiaries: General investors. Category: Economy.