This is the RBA Statement on Monetary Policy, SoMP

  • Board does not see strong case for near-term change in cash rate
  • says its outlook for inflation and unemployment mean higher interest rates likely at some point
  • says GDP growth to be above trend over forecast period, inflation forecasts revised up slightly
  • forecasts year-average GDP growth at 3.5 pct for 2018, 3.25 pct for 2019, 3.25 pct for 2020
  • forecasts underlying inflation at 1.75 pct dec 2018, 2 pct June 2019, and 2.25 pct from Dec 2019 to Dec 2020
  • forecasts unemployment rate at 5 pct in June and Dec 2019, 4.75 pct in June and Dec 2020
  • RBA says labour market stronger than expected, leading indicators suggest momentum could be sustained
  • says stronger growth and labour mkt expected to generate gradual rise in wages, inflation
  • says board assessing impact of slow growth in household income amid high debt, falling house prices
  • says overall effect of higher money mkt rates on banks' funding costs and profits has been fairly small
  • says possibility of escalating trade protectionism presents a significant risk to global growth
  • says many Asian economies could be affected by US-China trade tensions because of supply chain impact
  • says demand clearly slowed in Sydney, Melbourne housing with prices continuing to decline steadily
  • says non-mining investment has grown strongly, mining investment likely to reach trough late 2018/early 2019
  • says it appears dwelling investment is close to its peak in current cycle
  • says housing credit conditions have tightened, and demand for credit has also slowed
  • says trade-weighted a$ contained by offsetting forces of rising commodity prices, declining yield differential
  • any AUD depreciation amid stronger global inflation and/or demand positive for growth and inflation outlook

Quick headlines from the Statement via Reuters

For the full text, link

OK, loads of headlines distilled from the complete text of the policy, distilling a little further:

  • GDP and CPI forecasts nudged a little higher
  • Unemployment rate forecast a little lower
  • but no case for a near term policy move on the cash rate
  • the usual risks noted

No near term cash rate move will not surprise many at all. Bank appears well and truly on hold given the data flow.

AUD down a few tics. Little change.

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