Steady Jobless Figure May Stop Rate Cuts

With Australia’s unemployment rate steady, there is a belief the Reserve Bank (RBA) may not look to ease interest rates further.
In what would be disappointing news for mortgage holders, HSBC Global Research believes that with the unemployment figure holding at 5.4 percent, the RBA may have reached the bottom of its easing cycle.

HSBC said the unemployment numbers would be a comfort to the RBA, vindicating its decision to hold the cash rate steady in November. "There is no smoking gun here for another cash rate cut in December on the basis of the domestic economy," HSBC said.
"Indeed, if the unemployment rate stays under 5.5 per cent from here - as monetary policy supports the interest rate-sensitive sectors of the economy enough to offset the forthcoming slowdown in mining investment next year - the economy should rebalance quite smoothly. If this plays out, the RBA could be done for this cycle.”

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