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.

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