Citi on the Reserve Bank of Australia interest rate meeting Tuesday 2 June 2020 (announcement due at 0430GMT)

  • recent optimism by Governor Lowe ... last week said that there were upside risks to growth
  • RBA meeting could see a reiteration of this more optimistic domestic outlook, reflecting Governor Lowe's latest comments.
  • we expect no policy changes and a reiteration that policy will remain accommodative for an extended period.

On AUD Citi hold a structurally bullish view:

  • China PMI tailwinds
  • positive risk sentiment
  • iron ore prices rallying
  • comments by Treasurer Frydenberg on boosting construction activity
  • recent optimism by Governor Lowe
  • lack of RBA bond purchases in close to a month

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