Here are the views on what the Reserve Bank of Australia (RBA) will announce from the policy board meeting on 04 November 2014 from Goldman Sachs and other investment banks.

Via eFX:

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The following are the expectations for today’s RBA policy meeting as provided by the economists at 10 major banks.

Goldman:

  • We expect rates on hold (Cash Rate Target at 2.50%, in line with consensus).
  • However, with the AUD still tracking above fundamentals and the RBA’s outlook for Australia’s major trading partner growth and commodity prices both cum-downgrade, a risk remains that the central bank could surprise markets with a slightly dovish tilt

Credit Suisse:

  • We expect the RBA to keep rates on hold in line with consensus.
  • While we don’t anticipate a kick-up in AUD rhetoric, the statement could read slightly more dovish given weak iron ore prices and softer Chinese growth.
  • Meanwhile, October employment is expected to rise 10K, but with the unemployment rate holding steady at 6.1%.
  • We remain bearish AUDUSD and see scope for some tactical weakness heading into the RBA decision.

BofA Merrill:

  • We now expect the RBA to keep the cash rate unchanged throughout 2015.
  • While the AUD remains overvalued by fundamental measures, a still dovish Fed, stabilizing growth in China and the risk of a seasonal move higher in iron ore prices is likely to keep the AUD range bound over the coming month, with some risk that we see a short-term squeeze higher if speculative short positions are reduced.
  • We continue to expect AUD/USD to end 2014 at 0.88 and expect a much bigger decline in 2015 once resource investment, and associated capital inflows, slow sharply in 2015.
  • The latest depreciation in the AUD is likely to be welcomed by the RBA but has not changed its view that the exchange rate remains above most estimates of its fundamental value, particularly given the continued deterioration in Australia’s terms of trade.

Barclays:

  • Our Australian economist expects the RBA board to leave rates unchanged at 3.5%, but sees a risk that it drops the forward guidance of a period of stable rates.
  • The RBA is also likely to retain its language that the AUD exchange remains uncomfortably high by historical standards.
  • We think that a drop of the forward guidance would likely provide support for AUD.

ING:

  • the focus shifts on the RBA rate decision and the statement.
  • Despite lower Q3 CPI print last month we do not expect any dovish bias (as opposed to the RBNZ statement last week), potentially providing some mild support to AUD.
  • Yet, with the expected general USD strength this week, any AUD/USD should be faded ahead of the Friday’s US employment report.

JPM:

  • We expect no change from RBA, though the nagging resilience of AUD may warrant a renewed jawboning effort as the Governor removed the reference to AUD being above “fundamental value” in October

Westpac:

  • This week will be the first November of the Governor’s long tenure that there is no chance of a November move.In fact it seems highly unlikely that there will be any major surprises.
  • In his statement the governor is likely to maintain the two key assertions which have been used all year: an overvalued currency; and the expectation that rates will remain unchanged for some period. Specifically, we expect the statement to repeat key phrases: “the exchange rate… remains high by historical standards”; and “the most prudent course is likely to be a period of stability in interest rate

Credit Agricole:

  • Under the limelight will be the RBA policy meeting and the quarterly RBA statement on monetary policies.
  • A major surprise is unlikely, however, with any change in RBA economic forecasts and any comments on the housing market likely to gather most interest.

BNPP:

  • The RBA’s policy statement this week is likely to continue to signal a period of stability in interest rates.
  • The central bank is also likely to reiterate that the exchange rate is high given the declines in commodity prices.
  • The meeting should be broadly currency neutral although in the context of some recent very dovish monetary policy outcomes elsewhere in the G10 (namely the Riksbank, the BoJ, and, potentially, the ECB) our bias is for a stronger risk sentiment, a lower EURAUD and a higher AUDJPY.

Nomura:

  • We expect the RBA to keep it policy rate unchanged at today’s meeting.
  • We believe that the RBA is also likely to reiterate that AUD “remains high by historical standards, particularly given the further declines in key commodity prices in recent months” and that “It is offering less assistance than would normally be expected in achieving balanced growth in the economy”.
  • We think the statement will continue to suggest that the RBA is not considering any changes to its policy stance and will very likely reiterate that “the most prudent course is likely to be a period of stability in interest rates”.
  • We continue to believe that the RBA will keep monetary policy unchanged until mid-2015.
  • With the FOMC clearly signalling that policy normalization remains on track and commodity prices remaining weak, we continue to believe that AUD/USD should drift lower in coming month, as the currency continues to realign to weaker commodity prices

More investment bank views and analysis is at eFX