This could be the making or breaking of the GS economics team, who were officially poached by Merrill Lynch, only to be stolen back by GS with a reportedly "blank-cheque". If I was Merrills, I would be gunning for a good interest rate strategist rather than a chief economist, fwiw. The market tends to value the former more highly. In any event, there is no doubt that Tim Toohey et al are very highly regarded for their research capabilities in the investment community (and I agree with this view). Like Koukoulos, Goldman originally forecast a rate cut in October, but pulled that baby from the starting gates when it became increasingly unlikely. I was always in the no-hike camp given the definitional need to have access to the Q3 CPI, although I became increasingly nervous as we got closer to the date as I thought there was a low probability risk that Glenn Stevens might have been influenced by his G20 finance ministers meeting. Now GS are projecting back-to-back cuts in November and December. This would be a dream come true for Australian home owners, with house prices the biggest beneficiary...
Oct. 14 (Bloomberg) -- The “very small” decline in the Australian unemployment rate is not enough to deter the Reserve Bank of Australia from cutting its benchmark interest rate in November...Goldman Sachs & Partners Australia said today.
The data “does not alter the fact that conditions in the Australian labor force have deteriorated and will likely continue to do so,” the company said in an e-mailed report.
Goldman Sachs expects the RBA to cut its key rate by 50 basis points by the end of the year.
