Rating agencies may eye Australia – NAB

FXStreet (Barcelona) - The Research Team at National Australia Bank notes that the weak state of the Australian economy combined with reduced possibility of any fiscal tightening may attract rating agency interests for the Australian economy.

Key Quotes

“The Mid-Year Economic and Fiscal Outlook is released next week. We expect downwardly revised economic forecasts and an upwardly revised forecast budget deficit track over the next four years. Importantly – and appropriately in our opinion – the Treasurer stated last week that neither the MYEFO nor next year’s budget will seek to tighten fiscal policy to offset the effects of the further weakness in the terms of trade, given the weak state of the economy. This may attract rating agency interest.”