No Cup Day cut on the cards, ETF provider claims

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An ETF provider has predicted the RBA will hold fire at its cash rate meeting today.

BetaShares chief economist David Bassanese said the Bank is unlikely to cut the official cash rate today, in spite of mounting speculation and the Reserve Bank's precedent of rate moves on Melbourne Cup Day. Bassanese said the RBA may abide by the philosophy of "if in doubt, do nothing".

"With tentative signs of improvement in the local economy, the RBA should – and most likely will – hold fire at its policy meeting on Tuesday morning, allowing most investors to concentrate on Melbourne Cup festivities," he said.

While Bassanese isn't expecting a cut today, he does predict that the RBA will begin dealing cuts in the near future.

"“The RBA will eventually need to cut the official cash rate to 1.5% by mid-2016, as the housing upturn wanes and the unemployment rate begins to rise again," he said.