A note from Westpac argues that confidence that the RBA will start cutting rates at its February 18 Board meeting is expected to remain steady this week.
While there’s room to debate if markets are overestimating the chances of a rate cut, says the analysis, the more important question now is how the easing cycle will unfold—specifically, the final rate level and the speed of rate reductions.
Westpac still predicts 100 basis points of cuts in 2025, with market expectations slightly less aggressive, pricing in just over 3.5 cuts.
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On the Reserve Bank of New Zealand, WPAC add that the ‘main risk’ is further easing from the Bank.
All four of Australia’s largest banks expect a 25bp rate cut on February 18 from the RBA.