The Reserve Bank of Australia cash rate announcement and Governor Lowe's statement will come at 2.30pm Sydney time on Tuesday 3 October 2017 (0330 GMT)
- No change to the cash rate target is expected and little change is expected in the accompanying statement
Some of the Aussie bank previews ... (boldings mine)
Westpac:
There will be no change to the cash rate. As with recent meetings, the interest will be in the Governor's commentary. In fact, we don't envisage too much change in the key themes:
- "conditions in the global economy are continuing to improve".
- "growth in the (Australian) economy will gradually pick up over the coming year".
- "the outlook for non-mining investment has improved".
- "residential construction remains at a high level, but little further growth is expected."
- "slow growth in real wages and high levels of household debt are likely to constrain future growth in spending".
- "the unemployment rate is expected to decline a little over the next couple of years".
- "stronger conditions in the labour market should see some lift in wages over time".
- "an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast".
- "there are signs that conditions (housing) are easing, especially in Sydney".
- "growth in housing debt has been outpacing the slow growth in household incomes".
- "the Board judged that holding the stance of monetary policy unchanged... would be consistent with sustainable growth in the economy and achieving the inflation targetover time".
These assessments are consistent with a neutral policy bias.
ANZ:
- The RBA is widely expected to leave rates unchanged but, as always, the post meeting statement will be scoured for any shift in sentiment
and - The AUD is unlikely to get much momentum out of the RBA meeting this week as the statement will remain largely unchanged.
and ... not RBA-related but of interest nonetheless:
- It's a heavy calendar for Australia this coming week. Building approvals are likely to show that construction activity will remain at solid levels; while early indicators suggest retail sales in August were weak. That said, we do not think that this weakness will be sufficient to derail the RBA's rising confidence in the domestic economy and, as such, we expect the AUD to remain well supported at current levels.
National Australia Bank:
Datawise, the main pieces are Building Approvals on Tuesday, while Thursday brings the Trade Balance and Retail Sales
- note NAB's cashless retail indicator points to downside risks for Retail Sales, though our Online Retail Sales index gave the reverse signal, leading us to reduce our forecast decline somewhat
First up the RBA Board Meeting
- The market unanimously expects the RBA to be on hold. However, recent strength in the labour market has also seen the market reassess its expectations for the cash rate and is now fully pricing an RBA rate hike by August 2018.
- NAB is similar and is expecting two rate hikes in 2018 - one in August and one in November.
Expects this same positivity to be reflected in the post-meeting Statement, driven yet again by another stellar jobs print of 54k in August against expectations of 20k.
- Governor Lowe's recent speech played up this positivity, stating the economy was "on course".
- However, the speech also downplayed the likelihood of a near-term rate hike, with Governor Lowe stating "not for some time".
- Other data out during the period included Q2 GDP figures which were mostly as expected - one weak point though was wages growth.
- We expect the language around the dollar to be unchanged.
