RBA 3 February stocks

Relates to the 5 RBA stocks relating to the 3 February cash rate announcement

In my opinion, the market is overpricing a 100 point drop. Most Australian economists are predicting between a 50 and 75 basis point cut: [www.theaustralian.news.com.au]

That was before the CPI figures came out.

CPI came out yesterday and economists and the finance sector alike are picking around 100 points now

[www.theaustralian.news.com.au]

No, I'm not sure you're right there. It seems economists are picking less than 100 points, while the markets are leaning towards the bigger cut: [business.smh.com.au]

That article came out yesterday when the CPI came out, it depends if you read that as economists were expecting the smaller cut as a result of the CPI coming out. Economists at the time were picking 50 points and that has most likely been written in to the article.

However the article I posted came out today, and takes into account the fact that they would have now analysed the CPI data and revised their expectations of the cut on the 3rd Feb

I'm also looking at it from the view that traditionally the RBA's rate has been below ours. With them on 4.25 at the moment and us now on 3.5. I think a cut of 100 points to bring them down to 3.25 would be an option, maybe even more.

[www.weeklytimesnow.com.au]

Are the RBA.Other stocks undervalued at the moment?

[business.smh.com.au]

No, I think the RBA.75 stocks are the undervalued ones. Nine out of 20 economists surveyed by Bloomberg expect a 75 point reduction: [www.bloomberg.com]

So, either way the RBA 100 stocks are overvalued??

Yeah, I'm pretty stuck in choosing between 75, 100 and Other

with 9/20 economists picking 75 and 11/20 picking 100, I do think that 75 is undervalued.

I think 75 should be higher than OTHER but lets see what happens.