FX.co ★ RBA Rate Cut Unlikely Before Q1 2025: Capital Economics

The Reserve Bank of Australia is anticipated to maintain its interest rates steady until at least the first quarter of 2025, as labor market conditions remain robust compared to full employment, according to Abhijit Surya, an economist at Capital Economics.

Recent statistics from the Australian Bureau of Statistics indicate that the unemployment rate held constant at 4.1 percent in September. There was a decrease of 9,200 in the number of unemployed individuals, while employment figures rose by 64,100 from the previous month. Additionally, the participation rate reached a record high of 67.2 percent.

The economist observed that employment growth is likely to surpass the central bank's year-end projection of 1.9 percent.

"Given the current intensity of the labor market, the Reserve Bank of Australia is unlikely to reduce rates before the first half of next year," the economist stated.

Considering the labor market's resilience, the economist anticipates a total of 75 basis points in rate cuts across the forthcoming easing cycle.