The Reserve Bank of Australia meet today

  • Announcement scheduled for 0430GMT
  • It will be accompanied by the Statement from Governor Lowe
  • The widespread expectation is for no change in the cash rate
  • It's the Statement that will vary from its previous, it is, on balance, expected to be a little more upbeat

I posted a couple of previews already:

This now, via ANZ( in summary):

  • The sharply improved tone of labour market data will also be discussed and highlighted in the subsequent press release
  • The Bank's language around the labour market is likely to change from "indicators of the labour market remain mixed" to something more positive
  • On the international front, while the RBA is likely to reiterate that "the broad-based pick-up in the global economy is continuing", the question is whether the Bank goes a step further and echoes the recent sentiments of other central bankers noting that rates are "extraordinarily low" (BoC) or that "some removal of monetary stimulus is likely to become necessary" (BoE). We expect that the RBA will stop short of doing this.
  • We do not think the Bank is close to removing stimulus.
  • The recovery is still fragile
  • There continues to be spare labour market capacity
  • There remains uncertainty over the drivers of growth over the next few years given constraints on households and falling housing construction
  • Underemployment in particular remains stubbornly high
  • This suggests that any pick up in wages growth in Australia is likely to lag the other major economies
  • A significantly later start to any tightening cycle is likely to be appropriate.
  • More broadly, we expect the RBA to continue to flag that monetary settings remain appropriate for returning inflation into the target band.