Ahead of the RBA meeting announcement later today
An article from Bloomberg overnight: RBA Wins Room to Hold as Tighter Budget Seen
Says:
- There is speculation that the RBA will have room to hold record-low interest rates as Treasurer Joe Hockey’s first budget focuses on deficit reduction
- The RBA said in April fiscal consolidation may weigh on public demand
- “Seeing strong action on the fiscal front provides even greater levels of confidence in Australia,” Adam Donaldson, the head of debt research at Commonwealth Bank of Australia, said in a May 2 phone interview. “There’s widespread expectation that tightening of fiscal policy will mean the Reserve Bank will remain sidelined for even longer than they might otherwise, and that’s a key factor lending support to the Aussie bond market.”
