News Headline Summary

Reserve Bank of Australia saw softer labour market giving scope for interest rate cut

Says:

- Importantly, further signs of stabilization in China had helped remained over US fiscal cliff.
- Board briefly noted AUD remained at a high level, minutes show no other mention of currency.
- Tentative signs of dwelling investment picking up but non-residential construction lagging.
- Expected effects of cuts starting to be seen, to have further impact over time.
- Following previous cuts, lending rates were now clearly below their medium-term averages.
- Softening labour market, easing wage pressures to help with inflation.
- Inflation outlook afforded some scope to provide additional stimulus to support demand.
- Saw case for cut given peak in resource investment was near, non-mining investment was subdued.

Reaction details (19:33)

- AUD/USD immediately moved lower by 5 pips from 1.0541 to 1.0536, however, this movement has been pared one minute after, trades 1.0543 (-9 pips) last.
- No reaction observed in ASX 200.

Analysis details (19:40)

- RBA cut rates to 3.00% from 3.25%.
- It was RBA's last rate decision until February 2013.

17 Dec 2012 - 19:30 - Fixed Income - Source: Newswires

Subscribe Now to RANsquawk

Click here for a 1 week free trial

RANsquawk provides audio news and commentary for over 15,000 professional traders and brokers worldwide. Services include: