1. That is a very complicated note by Chris — seems the simple point that ‘policy is stimulatory’ is the main message. I think that is true. Financial conditions seem to be meaningfully easier than a year ago.

  1. Sorry, I do read CJ and CJ has been calling and defending no rate cuts since the RBA cutting cycle began. If it was up to him, we wouldn’t have had any cuts at all in 2012. At one point, when the cutting cycle will be finished, he’ll be right of course. Maybe tomorrow…. I do not see why you would not cut tomorrow and wait for March instead. Building approvals was not good today… why would it be, when new home sales are still at lowest level on record? Let’s first sell all the new unsold houses out there (which by the way are far too expensive compared to existing stock).

  2. Just freshly…. According to CJ “there is a credible case that the RBA’s cash rate should be perhaps 50 to 75 basis points higher than its current threshold”. Because the market has appreciated recently. And house prices have stabilized. Never-mind that the local market is higher exactly because of those rate cuts….. and we are back now to where we were 2 years ago. and still significantly lower than pre-GFC.
    Also, according to CJ, “a predictably dovish statement on Tuesday was crafted to avoid upward pressure on the currency”… as if markets are that credulous.
    Tomorrow we get retail sales for December. Imported consumer goods were reported yesterday at -2% for December. Thursday is the unemployment rate. cheers

    1. Yeah, i read that and thought — well we’ll know in a few quarters. If inflation is headed to 3%, i guess he was right … but i cannot see that sort of acceleration in the current data.

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