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RBA Watch: RBA will cut rates by only 75bp this cycle

We expect the Reserve Bank of Australia to cut rates by 25bp, to 4.10%, at its meeting on 18th February. Although the labour market remains resilient and there are tentative signs of a pickup in household spending, the Bank will put more emphasis on the sharper-than-expected slowdown in underlying inflation. That said, our base case continues to be that the easing cycle will prove short-lived.

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