### POV: RBA TO HOLD STEADY, AWAIT FISCAL.......>

RBA: ### POV: RBA TO HOLD STEADY, AWAIT FISCAL IMPULSE

The RBA will likely hold off on any overly dovish adjustments in Tuesday's

MonPol statement and should leave the cash rate unchanged. The federal budget,

due later Tues, is expected to point to a surplus and include stimulatory fiscal

measures. The Bank will likely wait and see how the govt's loosening of the

purse strings supports the real economy -- Luci Ellis, Asst Gov for Economics,

recently noted fiscal policy will be taken into account when setting rates.

- Markets continue to price monetary loosening, with interpolated OIS pricing an

around 75% chance of at least one rate cut by year end.

- Base Case: The Bank should leave its cash rate unchanged, reiterating that the

next move in the cash rate could be up or down, likely saved for the minutes of

the meeting. Wait and see approach ahead of the federal budget.

- Hawkish Risk: Optimism as U.S./China trade matters appear somewhat improved.

- Dovish Risk: Increased worry regarding the health of the global

economy/gyrations in global financial markets, dovish RBNZ feedthrough or

increased focused on the slowing of the domestic economy/housing market.