Yarra’s Tim Toohey.
Eamon Gallagher
The Bank of Canada began tapering in April but Australia is only likely to begin easing its monetary policy this week, despite the two countries sharing similar economic profiles and Australia’s recovery tracking well ahead of Canada’s.
“The Bank of Canada has laid out a roadmap on the timing of its first hike for the second half of 2022, essentially two years ahead of the RBA’s current guidance,” said Tim Toohey, Yarra Capital Management’s head of macro and strategy.
“The RBA is likely focusing more on the Fed’s tapering plans than anyone else’s. So although the Fed is not the leader, once it puts its own stake in the ground for the commencement of tapering, the RBA will likely feel more confident in announcing further reductions in its own buying.”
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