MNI RBA Review - April 2021: Watching, Waiting

• The Bank left its monetary policy settings unchanged, as expected, with the RBA employing widespread changes in its choice of rhetoric, although the underlying message didn't stray from the mantra of recent addresses.
• In essence, the Bank is more upbeat given the evolution of the local economy, but spare capacity remains elevated, with the unemployment rate some way away from levels that will result in anything like satisfactory wage growth (based on the Bank's own assumptions). A reminder that the RBA Governor did not push back against suggestions that NAIRU could start with a 3 when questioned on the matter in March.
• The Bank will want to gather as much information as possible before making a decision on the implementation and sizing of any further QE packages and/or the potential rolling of the focal point of its 3-Year ACGB yield target to ACGB Nov '24 from ACGB April '24, with a formal announcement re: the latter seemingly expected before the end of August.

Please use the following link to access the full review:

RBAReview - April 2021.pdf