RBA monetary policy decision due July 2 2019 - preview (most expect a rate cut)

Author: Eamonn Sheridan | Category: Central Banks

The rbaa Reserve Bank of Australia interest rate announcement and statement is due at 0430GMT on Tuesday.

Of 26 analysts surveyed by Bloomberg, 18 expect a cut 1% while 8 expect on hold at 1.25%.

CBA, WPAC, NAB AMP, Macquarie, GS all looking for a cut.
Among the 'on hold' are Citi, UBS, HSBC.

Via ANZ, in brief;
  • We expect the RBA to cut rates in July, given the Board's signal and the Governor's speeches. 
  • The market doesn't think it's a done deal, though, and is pricing around a 70% probability of a 25bp cut in July. 
  • Assuming the RBA eases at next week's Board meeting, we don't think Governor Lowe will - at Tuesday evening's speech - indicate that another move is more likely than not. We do expect another rate cut, but the Bank is starting its forecast update for the August Statement on Monetary Policy(SoMP) and Lowe will not want to pre-empt its outcome. 
  • On the basis of the RBA's May forecasts and what has happened since, we struggle to see how the August SoMP can do anything other than build further easing into the central outlook. In which case, why wait for a month or two before delivering what the Bank has concluded is required?
  • We don't think the May example - when the RBA followed just such a strategy of delay - is indicative of what the RBA will do in August. The Bank has firmed up its thinking about full employment and there is no election to complicate timing. 
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You'll notice from ANZ's comments that RBA Gov. Lowe is speaking after the meeting. Due at 0930GMT.
 
The rbaa Reserve Bank of Australia interest rate announcement and statement is due at 0430GMT on Tuesday.
Lowe is one of the few Governor's of DM central banks not to schedule a news conference after a rate decision. Ever. 
Dunno why not. 

We make do with his accompanying statement, I guess he controls the message a little more than having the unruly mob ask him questions ;-) 
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