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

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

- TD Securities: The statement was a little longer than last month but the

message was little changed. We were looking for a nod to higher underlying

inflation, but the Bank's narrative was little changed. We still look for a

marginal upgrade to the 2018 outlook to 2%/y in Friday's SoMP.

- Westpac: Commentary in previous statements around the labour market has been

unreservedly upbeat. It was therefore interesting to note that the Gov.

recognised that employment "growth has slowed over recent months". Nevertheless,

the Gov. remains confident that solid employment growth will lead to a gradual

reduction in the unemployment rate. Since the last SoMP, housing markets have

slowed further; financial conditions have tightened; employment growth has

slowed; and equity markets have become more volatile. All of these factors point

to the Bank having even more scope to remain patient with respect to policy. As

we have consistently argued since mid- 2017, Westpac continues to expect that

the cash rate will remain on hold in 2018 and 2019.