One more cut expected for RBA cash rate: ANZ

Rising unemployment and the unwinding of the mining investment boom could contribute to one more cut for the RBA cash rate, according to the latest report by ANZ.

ANZ forecasts the rate to be cut further by 25 basis points to 2.25% in the last quarter of this year, and expects the rate to hold steady for 2014.

The report also notes that Australia is nearing the end of the easing cycle with policy rates already at very accommodative levels.

A further rate correction could present a medium-term opportunity for borrowers to lock in lower-term rates.

With the expectation that the US 10-year bond yield to end the year at around 3%, ANZ also forecasts that yields will be pushed above 3.5% by the end of 2014. ANZ also forecasts US economic growth to be around 3.1% for next year.

With a recovering global market, local market rates can expect to be driven higher. As such, ANZ expects the cash rate to rise in 2015.