RBA Board cuts policy rate 25 basis points

Below is a link to the NAB economic commentary around today's rate cut. In summary:

• The key to this rate cut is the outlook a year ahead, where the RBA is concerned that the end of the mining investment boom will lead to weaker growth;
• The on-going strength of the AUD is putting the brakes on the economic outlook;
• RBA has switched its focus to weak domestic demand in construction and labour demand;
• Another 25bps of easing is probably coming;
• The timing of the next rate cut could depend on the Q3 CPI (24 Oct), with a lowish outcome providing the green light for a follow-up cut in Nov. Otherwise rates could be on hold until February.

http://www.medicalfinancial.com.au/images/121003RBAOctStatement2012.pdf