RBA like on hold; next cut in February - TD
The RBA decision is at 0330 GMT
TD Research discusses its expectations for today's RBA December policy meeting.
"TD and consensus expect the RBA to keep the cash rate on hold at 0.75% at today's Board meeting. OIS is placing ~10% chance to a 25bps cut. We think it is highly unlikely the RBA cuts, pre-empting a possible weak Q3 GDP outcome on Wed. Granted, inputs for Q3 GDP have so far been weak - retail volumes -0.1%/q, Construction Work Done -0.4%/q, Capex -0.2%, equipment plant and machinery -3.5%. But Net exports could be slightly positive as could public spending (we will find out tmrw). Even after all the partials are accounted for by Tues, ~30% of GDP will remain unknown heading into Wed's Q3 GDP release, providing no compelling reason for the RBA to jump and cut ahead of the release," TD projects,
"We expect the RBA to cut the cash rate to 0.5% in Feb'20," TD adds.
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