I must admit I'm not across the reason for the rate cuts in NZ, India and Thailand however I have to follow the Australia monetary decisions as I write reports for my company's Board. The decision for the RBA to cut rates has been due to several reasons which, if understood, don't paint such a bleak picture.
Inflation isn't hitting the 2-3% target level mainly due to wages not growing even though unemployment is extremely low. The reason why wages aren't growing is because even with so many people having jobs, there is still a surprising amount of spare capacity in the labour market. What does that mean? There are a lot more jobs out there than expected which is not a bad problem to have.
Agree with the economic non-confidence but this is mainly due to the trade war. My main concern is that with the interest rates so low it removes a main stimulus tool in the form of monetary policy loosening if there were another global crisis.
EVN Price at posting:
$5.49 Sentiment: Hold Disclosure: Held
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