NAB Research discusses its expectations for tonight's RBZ policy meeting.
"The RBA is expected to cut the cash rate on Tuesday to a new record low of 1.25%. We expect a follow-up cut in August, with the risk of additional stimulus by early 2020," NAB projects.
"The depth of the easing cycle ultimately delivered by the RBA will depend on: (1) the extent of the slowdown in the economy; and (2) the bank’s assessment of the stance of policy, relative to its view of the neutral cash rate. The RBA has reduced its midpoint estimate of the neutral rate from 5% prior to the global financial crisis to 3.5% in 2017 and we think it could soon trim it to 3-3.25% given lower potential growth and a wider spread between mortgage rates and the cash rate," NAB adds.