Dow Jones Securities: Reserve Bank of Australia Expected to Cut Interest Rates by 25 Basis Points, Economic Forecast May Provide Basis for Further Rate Cuts.

Babcock Securities pointed out that, given that the annualized trimmed inflation rate has remained within the Reserve Bank of Australia's target range of 2-3%, and overall employment data has been steady in the past two months, we expect the Reserve Bank of Australia to unanimously approve a decision to cut interest rates by 25 basis points to 3.60%. This decision will be accompanied by updated economic forecasts, with a slight downward revision expected for GDP growth forecasts, a slight upward revision for unemployment rate forecasts, while trimmed inflation rate forecasts are expected to remain unchanged. We anticipate that the downward revision in GDP forecasts and the upward revision in unemployment rate forecasts will provide the basis for further interest rate cuts. However, if the Reserve Bank of Australia maintains trimmed inflation rate forecasts at 2.60%, the market may lower its expectations of interest rate cuts between now and the 2025 monetary policy statement meetings and reduce bets on cash rates falling below 3.10%. Therefore, we expect the market to show a mild hawkish reaction, with the yield curve tending to flatten.