Consensus too hawkish on Asia’s policy rate outlook

All four central banks which announce their policy rate decisions this week are likely to signal that global worries are a key downside risk for local growth. Only in Australia do we expect a rate cut over the next few days, but, given our view that hopes for a global recovery next year will be dashed, we see further policy loosening across much of Asia by end-2013. Our forecasts contrast with the consensus, which expects rates to be hiked next year.