MNI 5 Things: RBA Rate Unch, Says Wage Growth Likely Troughed

By Sophia Rodrigues

     SYDNEY (MNI) - Following are the five key observations we made from the

Reserve Bank of Australia's cash rate decision on Tuesday:

     --The RBA left the cash rate unchanged at 1.5%. This was the 17th meeting

in row that the cash rate was left on hold and the outcome is in line with

expectations of both money market and economists.

     --A key addition in the statement was the view that "rate of wage growth

appears to have troughed." However, there is no change in the RBA's oft-repeated

comment that wage growth remains low and is likely to continue for a while yet.

     --There was no mention of threat of trade war but it is likely that this

topic formed part of board discussion and will be revealed in the minutes due

after two weeks.

     --The RBA pointed to increase in volatility in markets from the low levels

of last year. It is possible trade war fears in the market will figure in the

discussion on market volatility.

     --There were tweaks in the commentary on the housing market with the RBA

specifically noting slowing in housing markets in Sydney and Melbourne. The RBA

pointed to supervisory measures being helpful in containing the build-up of risk

in household balance sheets, but reiterated that household debt level remains

high.

     --The RBA maintained household consumption remains one continuing source of

uncertainty.  

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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