RBA announces its latest monetary policy decision - 7 May 2019
- Prior 1.50%
- Still sees further spare capacity in the economy
- Notes that March quarter inflation is noticeably lower than expected
- Says further improvement in labour market is needed to meet inflation target
- Domestic uncertainty remains around household spending, falling house prices
- Conditions remain soft in the housing market
- Expects economy to grow at 2.75% in 2019, 2020
- Sees underlying inflation at 1.75% in 2019, at 2% in 2020
- AUD is at the lower end of its narrow range
- Outlook for global economy is reasonable, but risks are tilted to the downside
Overall, the statement is little changed and the RBA continues to emphasise on labour market data being key to their next decision. I reckon it's more of a case that they have one eye on the elections in two weeks' time rather than anything else.
A cut will come soon after as long as economic data continues to suggest such a move as it has done over the past few months. AUD/USD popped to a high of 0.7044 from 0.7000 on the release here but I'll be looking to fade the rallies in anticipation of a rate cut pricing over the next few weeks.
