Westpac’s Bill Evans on his own as ANZ, Commonwealth Bank and NAB tip no rate cut in March or April: Bloomberg

Westpac’s Bill Evans is now the only major bank economist tipping the RBA to cut the cash rate to 2.75% on March 5.

ANZ’s Warren Hogan has changed his call from a rate cut in March to the RBA leaving the cash rate on hold with 21 out 28 economists (including the Commonwealth Bank’s Michael Blythe and NAB’s Alan Oster) surveyed by Bloomberg expecting the RBA to hold firm.

Last week 20 out of 28 economists surveyed by Bloomberg tipped the cash rate to remain on hold in March.

A similar number – 19 out of 28 – are tipping no change in the cash rate in April with a small majority of economists (16 out of 28) tipping a lower cash rate in May (14 tip 2.75%, two tip 2.5%).

ANZ, Commonwealth Bank and NAB all expect a further rate hold in April but their end-of-year forecasts are quite divergent.

ANZ sees a cash rate of 2.50% by year-end, the Commonwealth Bank sees no more rate cuts this year, NAB sees a cash rate of 2.25% and Westpac expects the March rate cut will be the last for the year.

In his statement to a parliamentary committee today RBA governor Glenn Stevens hinted rates may not change in the next few months with the telling comment being that it is now “prudent to sit still” and wait to see what further impact lower rates will have on house prices and other sectors of the economy.

Westpac chief economist Bill Evans said on the back of the release of the February consumer sentiment index a week ago that the case remains for lower rates and still expects the RBA to cut rates by another 25 basis points at its March meeting.

According to Evans, the key report the RBA will deliberate on will the next Capital Expenditure Report (CAPEX), which is due to be released by the ABS on Thursday.

“This document will provide the first estimate of mining and non-mining investment intentions for the 2013/14 financial year.

“With the bank’s major concern being the need to rebalance the economy towards non mining investment, this report will be the most reliable assessment of whether business is responding to the low rates and the more constructive global environment, or whether more encouragement is required.

Apart from Westpac, the other respondents tipping a rate cut on March 5 are all foreign-based investment banks - BNP Paribas, CIMB, Deutsche Bank, Goldman Sachs, Macquarie Bank and Merrill Lynch.