📝Continue to Expect Two Further RBA Rate Cuts: Commonwealth Bank

We have maintained our base case for four rate cuts in total this easing cycle since October last year.We continue to expect two further rate cuts this year, but we now expect these to come a little quicker than before and favour August and September. The catalyst for the shift has been the RBA’s shift in tone on inflation.But risks are building to the downside. Inflation has moderated relatively quickly and wages growth is slowing even with the unemployment rate holding steady at 4.1%. The consumer recovery has been tepid and given offshore uncertainty could fail to pick up as expected.The risk lies with additional easingand a quicker easingand July cannot be ruled out, but the RBA would have to see hard data for this to materialise. The total easing this cycle from 4.35% to 3.35% takes thecash rate closer to neutral. If the global situation deteriorates there is the risk the RBA might have to take the cash rate into slightly stimulatory territory. - CommBank