Reserve Bank of Australia Statement on Monetary Policy

  • Board judged lower jobless rate "achievable" given subdued inflation
  • Board will be "paying close attention" to labour market at upcoming meetings
  • cuts GDP forecast for June 2019 by 0.75 ppt to 1.75 pct, Dec 2019 seen at 2.75 pct, Dec 2020 at 2.75 pct
  • sees trimmed mean inflation 1.5 pct June 2019, 1.75 pct Dec 2019, 2 pct for Dec 2020 and June 2021
  • forecasts unemployment at 5 pct out to Dec 2020, 4.75 pct by June 2021
  • forecasts made on "technical assumption" rates follow market pricing of two cuts to 1 pct
  • near-term indicators of labour demand have softened since the Feb. statement
  • partial indicators point to moderate GDP growth for the March quarter
  • RBA says domestic price pressures more subdued than previously thought
  • weakness in housing market dragging on inflation, rent inflation lowest since 1993
  • inflation constrained by government efforts on cost of living, a key uncertainty to outlook
  • RBA says near term outlook for consumption growth has been revised lower
  • strong growth in tax payments has dragged on household incomes
  • A$ at low end of range, low bond yields offsetting upward pressure from higher commodity prices
  • RBA says outlook for export growth and terms of trade revised upward
  • bank funding costs have eased, but not flowed through to variable mortgage rates
  • RBA says some signs growth has picked up in China
  • RBA says trade tensions remain downside risk to global outlook

Full text: Statement on Monetary Policy

What about this then?

  • forecasts made on "technical assumption" rates follow market pricing of two cuts to 1 pct

The forecasts are not for strong growth, they are weak and yet they assume two rate cuts. So, get on with it then?

AUD a few ticks higher, taking aout some stops resting above 0.7000.. It had been edging up prior to the SoMP and added a little more since.

And this:

  • Board will be "paying close attention" to labour market at upcoming meetings

A clear heads up on what to watch folks. We'll get the next jobs report on Thursday next week.