The Reserve Bank of Australia meet on Tuesday February 6 2018

There is not a January meeting (holiday!) so this is the first of the 11 meetings this year

Via Société Générale, in brief. They expect an on hold decision decision next week but look for hikes ... in 2019 ... the second half!:

  • Contained inflation and a relatively strong exchange rate suggest that there is little reason for the RBA to adjust the exceptionally accommodative policy stance in the near future.
  • However, with prospects of solid growth at home and abroad - and an exceptionally strong labour market - the case for maintaining a policy rate that is negative in real terms is becoming progressively weaker.
  • We therefore maintain the view that by the second half of next year the RBA too will begin to normalise its policy stance.

Major points from SG

  • Steady, low inflation will keep rate hike plans at bay
  • Global growth prospects continue to improve
  • Australia's labour market is still strong
  • Mixed growth signals for the fourth quarter
  • Housing and credit moving the RBA's way

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Note ... in addition to the RBA meeting next week

  • On Thursday (February 8) Governor of the Bank Philip Lowe speaks at the A50 Australian Economic Forum dinner
  • On Friday (February 9) the Bank publish its first Statement on Monetary Policy for the year

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