RBA monetary policy meeting today - on hold unanimously expected - preview

Author: Eamonn Sheridan | Category: Central Banks

Reserve Bank of Australia announcement and Governor Lowe's accompanying statement is due Tuesday 05 May 2020 

  • at 0430GMT 
Earlier previews are here:
Long story short is no change in policy is expected - indeed you can see from the second link on hold is the expectation right through this year according to Reuters polling.

Some very brief comments, Westpac go even further with their unchanged expectation:
  • Last week we forecast that the RBA would hold the cash rate steady at 0.25% out to at least December 2023. 
  • We argued that the unemployment rate and other measures of spare capacity in the labour market, such as the underemployment rate, would hold well above those levels which the RBA would assess as being consistent with their objectives (full employment of 4.5%) over that period.
Daiwa:
  • cash rate to be unchanged at 0.25%
  • current yield curve control target to be maintained at 0.25% for 3 year yields
Scotia:
  • As Australia's COVID-19 curve has flattened, the Reserve Bank of Australia's stimulus efforts have done likewise. 
  • The central bank sits on the lower bound at a cash rate of 0.25%, and just recently opted to skip purchases of additional government bonds following a stream of gradually tapered A$50 billion of bond purchases since introducing a QE program in March. 
  • No further stimulus efforts are expected on Tuesday with the risk more skewed toward discussing exit plans.
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ps. On Friday this week we'll get the latest RBA "Statement on Monetary Policy" with updated forecasts. 

pps. You may very well hear and see some arguing that market pricing is indicating a rate cut from the RBA today, with rates well under the 0.25% cash rate  - this is reflecting the RBA adding excess liquidity to the market at this time of increased stress, its not an indication of the likelihood of a rate cur today. 

Reserve Bank of Australia announcement and Governor Lowe's accompanying statement is due Tuesday 05 May 2020 
See here for global coronavirus case data
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