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How an escalation of the trade war could affect ANZ

Australia and New Zealand are safe havens in the current global trade storm because they have small manufacturing sectors, export little to the US and haven’t been hit with high US tariffs. We’re therefore sticking to our forecast that the RBA will only cut interest rates by 50bp. However, an escalation of the trade war would weigh on activity through several channels and prompt more aggressive policy loosening.

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