AUD - RBA's first meeting of the year is coming up, Lowe speech, the SoMP

After the CPI from Australia next week, preview here, there is a weekend and then a flurry of RBA activity:

• Policy meeting is Tuesday February 5
• Reserve Bank of Australia Governor Lowe speaks on February 6
• The February 2019 Statement on Monetary Policy on February 8

Westpac expect the RBA to be on hold.

Turning to WPAC on the Fed:

• we now expect the FOMC to remain on hold due to the Government Shutdown but continue hiking in June and September.
• Equity market volatility has undoubtedly unnerved the FOMC
• But more importantly the Government shutdown has impacted confidence and data availability. Under such a cloud of uncertainty there is little prospect for the FOMC to change rates much before mid-year. Accordingly we do not expect the next FOMC rate hike until the June meeting this year. We do expect a follow up move in September, retaining our original timetable for the federal funds rate to peak in September 2019. We maintain our core view that the US economy remains strong largely through a robust consumer, boosted by rising wages and strong jobs growth. We do not expect to see a marked slowdown in jobs growth and consumer spending until the September quarter. As with our views for Australia, we are out of step with current market pricing which largely expects US rates to now be on hold.