Big four banks warn first rate cut won't come until November, as 'incredibly strong' migration makes the RBA's task 'more difficult'

Big four banks warn first rate cut won't come until November, as 'incredibly strong' migration makes the RBA's task 'more difficult'The economics teams at Australia's 'Big Four' banks all expect the Reserve Bank to cut interest rates in November, rather than September.

Their revised forecasts mean the economics teams working for Australia's "Big Four" banks are now all on the same page. But that Taylor Swift-inspired boost to retail spending in February was wiped away in March, driven by large declines in New South Wales and Victoria . Anneke Thompson, CreditorWatch chief economist, said the very weak retail sales figures in March would be a relief to the RBA and reduced the threat of "sticky inflation" in the goods category.

Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia, said last week's surprise inflation data had sparked concerns that the RBA would have to raise rates again to rein in inflation, but consumer demand was clearly "very restrained" at the moment. "Given the RBA's ostensible resolve to return inflation to target within a reasonable time frame, it can ill afford to look past the upside surprises in the latest CPI and labour market data," Mr Surya said.

It's part of a larger conversation about whether or not shareholders are overvaluing bank stocks at the moment. NAB is first to report on Thursday, and it is forecast to deliver a half-year cash profit of $3.6 billion, down around 13 per cent from the same period last year. Mr Wiles believes investors have got it wrong in their assessment of the timing and size of any rate cuts coming from the Reserve Bank and the implications of those rate cuts for the big banks and their earnings.

"The majors head into 1H24 reporting with decent prospects of holding consensus EPS at current levels or seeing small BDD-driven upgrades," Mr Triggs said.

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