RBA meet on Tuesday November 3 - preview (and looking even further ahead)

Author: Eamonn Sheridan | Category: Central Banks

The Reserve Bank of Australia monetary policy meeting is expected to result in further easing.

Expected is:
  • a 15bp rate cut to the cash rate, which will bring it to 0.1% from its current 0.25%
  • also a 15 bp cut to its 3-year yield target and term lending facility (taking these also to 0.1%)
  • a QE programme for the longer bonds, 5-to-10 years
There is more at the preview I posted earlier, link here.

Scanning through some of the bank analyst notes, this via RBC:
  • Q3 CPI ... adds pressure on the RBA to deliver further easing at its next board meeting on 3 Nov, especially given its recent shift in focus to actual rather than forecast inflation. 
  • the 19th consecutive quarter or almost 5 years that annual core inflation has been below the floor of the 2-3% target. 
And, past this meeting:
  • Given the degree of excess capacity amid an uncertain recovery, rising labour market slack and persistent low productivity, we think core inflation is likely to edge towards 1% in the coming quarters with a disinflationary pulse remaining. This will keep pressure on the RBA to deliver further easing beyond the next board meeting where expectations are higher for multiple measures.
Bolding is mine.

The Reserve Bank of Australia monetary policy meeting is expected to result in further easing.

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