A preview of the Reserve Bank of Australia monetary policy meeting Tuesday 2 October 2018
The RBA is welded to a no change decision in rates for the foreseeable future, with most expecting rates unchanged for many, many months to come. So, for today .... errr, no change to the cash rate is the expected.
There have been a few developments in the domestic economy that may well be reflected in the Statement from Governor Lowe:
- Q2 GDP came in at a nice beat, a welcome positive surprise
- Employment data continues to show job growth, and a slight improvement in the rate of labour underutilisation (indeed, DB think this will lead soon to higher inflation pressures and is an AUD positive: AUD positives are flying under the radar)
- We have also had rate hikes at 3 of 4 of the major Australian banks
Offshore developments include:
- worsening trade tensions and the impact on China (exports expected to decline, stimulus is expected to try to boost domestic demand)
- emerging markets continue to be shaken by US rate hikes
- the bank will also be eyeing upcoming US mid-term elections
Having said all this, for AUD traders I expect the Statement will wash over without too much immediate impact.
ps. Earlier previews are here:
