So the RBA finally delivered the March rate cut… today on 5 May.
In trimming rates to 2.0 per cent, the RBA appears to have caught up with the invention of the wheel, plus the soft Capex data, the low inflation readings and the generally weak commodity prices. It is also sticking to its view, based on I am not sure what, that the Australian dollar remains overvalued. All of these issue were blindingly obvious in March and April but for some reason, when the cut was more or less priced in back then, it remained on hold.
Until now that is.
And fancy that! Cutting interest rates now to levels never before seen when annual house price growth remains around 7.5 to 8 per cent, when the number of new dwelling approvals has lifted to a record high, when global economic growth is forecast will be strong in both 2015 and 2016, when the AUD has already fallen 30 cents from its peak, when the number of ANZ job ads has risen for 18 months and if anything is rising at a faster pace, when commodity prices have been surprisingly resilient in the past month and a week away from a budget that will likely see government expenditure adding to bottom line GDP. Add to this cocktail booming wealth from the surge in house and stock prices and the stage is set for a sharp lift in activity into 2016.