AUSTRALIA VIEW: *** Bank views on today's RBA........>

AUSTRALIA VIEW: *** Bank views on today's RBA MonPol Decision (1/2):

- Barclays: We expect the RBA to keep its monetary policy unchanged given that

underlying inflation, though slightly higher, is at the bottom of the target

range and there is elevated spare capacity in the labour market which has

weighed on wage growth.

- CBA: There is plenty on offer. But we suspect the RBA's messaging will not

change. That means the cash rate will be left unchanged. The RBA will send a

positive economic message. The policy emphasis will remain on "patience" and

"gradualism" even while acknowledging that the next rates move is probably "up".

It would be difficult to forecast anything other than no change when RBA

Governor Lowe recently noted that "the Reserve Bank Board does not see a strong

case for a near-term adjustment in monetary policy"! 

- Citi: Inflation and growth forecasts are unlikely to be changed materially.

Thus there is no incentive for the guidance to change from the long-standing

neutral bias nor from the guidance that the next move is up but not near term.

This is despite tighter financial conditions and global growth risks.