Leading Australian broker Moshe Moses has predicted further cuts will take place in the second half of 2012, despite the current ‘wait-and-see’ approach by the RBA.
Speaking to Australian Broker Online, he identified the carbon tax and unfolding European crisis as playing major roles in the future.
“[The unchanged rate] was largely expected, only because there is no movement in the market at the moment. We’re waiting to see what the carbon tax will do. There is [also] a lot of uncertainty overseas, which is having a big impact. There is a real expectation it will come down,” he said.
Moshe also predicted significant movement in long-term fixed rates, which are already being slashed.
“Citibank has just announced a cut to its long-term fixed rates, so this is where there will be movement and change in the near future,” he said.
Moshe also confirmed the current flat rate would have little to no impact on his clients.
“It’s not going to make any difference whatsoever. People are still being cautious, and the amount of activity hasn’t changed at all. Everyone knew this was coming,” he said.
Yesterday the Reserve Bank of Australia made a decision to keep the cash rate on hold at 3.5%.