### POV: RBA TO LEAVE RATES UNCHANGED, LIKELY...>

RBA: ### POV: RBA TO LEAVE RATES UNCHANGED, LIKELY TO TRIM GDP OUTLOOK

- The recent domestic CPI data will have helped re-affirm the Bank's view that

the next move in the cash rate will likely be higher, and that there is no need

for adjustments to the Bank's policy settings in the near term. Underlying infln

metrics were inline with the RBA's Q4 expectations, with the trimmed mean and

weighted median averaging +1.75% Y/Y, below the Bank's 2.0-3.0% target range.

- Markets continue to focus on prospects for further cash rate cuts from the

RBA, even as the Bank stresses it thinks the next cash rate move will be up.

Board member Harper was the latest to push the RBA's long held view, with a

clear focus on labour market dynamics apparent at the Bank.

- Central view: Constant msg, alluding to lower GDP expected in the SoMP, SoMP

to state the Bank still expects that the next move in the cash rate will be up.

- Dovish risks: Sino-U.S. trade matters, a broader Chinese economic slowdown,

domestic funding matters resulting in mortgage rate hikes and the feedback loop

from lower house prices into consumer behaviour.

- Hawkish risk: Play down recent data, GDP outlook unch, focus on labour mkt.