Collating a few very brief comments on the upcoming Reserve Bank of Australia meeting this week.
The long story short of course is the Bank will be on hold at this meeting.
ASB
- We expect the Reserve Bank of Australia's (RBA) Board to leave monetary policy settings where they are at the March meeting. The RBA has made it clear that the cash rate will stay where it is until inflation is sustainably within the 2-3% target. This is likely to take number of years.
BNZ
- the RBA meeting on Tuesday will also be closely watched to see if the central bank pushes back against the recent Aussie bond market sell-off.
IHS/Markit
- Markets will be looking for any signs that the central bank could be wavering from its commitment to keeping the policy rate low for several years despite recent signs of sharply rising price pressures and solid economic growth.
AMP Chief Economist Shane Oliver
- it will likely try and push back against the rise in bond yields by reiterating that the economy still faces uncertainties and has a fair way to go to meet the RBA's inflation and employment goals and that it does not expect the conditions to be met for a rate hike until at least 2024
- likely to confirm that it has stepped up its buying of 3-year bonds in order to maintain the yield target of 0.1%.
- RBA will be worried that the bond market is jumping at shadows - at least in part - ... Particularly given that if they give in and remove easing too quickly the $A will spike even higher"
