Rate cut could be on the cards this year, says brokerage firm

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A lower official interest rate might kick in later this year, according to a report by brokerage firm Invast Australia.

The surprise rate cut could come in around November or December, the report postulated. This is despite the dollar trading in the fairly resilient US$0.70 range

The cut could eventuate if the RBA comes to the conclusion that there isn’t any improving sentiment for the Australian economy.

The October 2015 Investment Committee Monthly Outlook also mentioned how China’s slowdown might not be as bad as it seems for the property market.

Indeed, affluent Chinese who could shift investments overseas have been a driving force in Australia’s property market. With the slowdown, however, China’s middle class has more of an opportunity to invest in and migrate to Australia.

“The expectation is that the middle class – who has also benefited from the recent Chinese economic growth story – will start looking offshore to invest and potentially migrate…There is the potential to have further impacts on certain parts of the Australian property market,” the report highlighted.

“We don’t buy the media narrative that the slowdown in China is negative for the Australian property market and rather see the middle class shift as becoming a major boost for Australia,” the report said.


 

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