UBS has brought forward its expectation for the first RBA rate cut from May next year to February, citing the downward effect of the Fed's expected rate cuts over the next year as providing room for the RBA to ease.

UBS chief economist George Tharenou said that Australian rates will remain elevated for longer, at least relative to the global trend, which is becoming increasingly dovish. UBS now expects a lower terminal rate in the US, with the federal funds rate falling rapidly to a level well below the RBA's official cash rate. He said these factors suggest the RBA may begin easing monetary policy sooner. (Gold Ten)