### POV: RBA TO LET DUST SETTLE ON TUESDAY -....>

RBA: ### POV: RBA TO LET DUST SETTLE ON TUESDAY

- External developments (Sino-U.S. trade & perception of reduced "hard-Brexit"

risk), coupled with a modest downtick in the domestic unemployment rate in Oct &

a steady round of Q3 CPI data have seemingly bought the RBA some time to see how

the "gentle turning point" develops. Bank's easing bias should remain, although

the bar for such a move may be a touch higher than prev. Mkts price a 6% chance

of a cut on Tuesday & only a ~25% chance of any further cuts through the end of

'19. Press reports have suggested that the new policy agreement between the

gov't & RBA could be announced Tues (exp. to be mainly superficial).

- Base Case: MonPol settings unch., finger pointed to lower GDP exp., reiterates

prepared to ease further if needed to support sustainable growth in the economy,

full employment & the achievement of the inflation target over time.

- Dovish Risks: More aggressive forward guidance (unlikely), potential to push

back against recent uptick in AUD TWI, broader discussion of extraord. measures.

- Hawkish Case: RBA will want to give time for 75bp of cuts delivered thus far

in '19 to filter through, watered down fwd guidance only (questionable) risk.