Key points are as follows…
· The RBA’s latest rate cut along with downwards pressure on the value of the $A should help Australian economic growth pick up to around trend next year.
· While 2% is likely to be the low, further cuts cannot be ruled out, particularly if the $A remains too strong.
· For investors: expect bank term deposits to offer poor returns; consider asset classes providing higher and more stable yields; and expect the $A to continue to trend down.