POV: ### RBA TO TILT MORE DOVISH, CHANCE OF.....>

RBA: POV: ### RBA TO TILT MORE DOVISH, CHANCE OF CUT

- The Q1 CPI print missed RBA and mkt exp., triggering a swathe of bets on a

cash rate cut at the May meeting (around 46% priced in OIS) & front-loading of

economists' calls re: rate cuts (14/26 in the BBG survey look for a cut in May).

The April minutes gave more time to downside matters in the Bank's scenario

analysis, but the latest labour mkt data was strong, despite the unemp rate

edging higher -- a by-product of a higher participation rate -- while headline

job growth topped expectations. The question is; will Q1 CPI push the RBA's

hand? Some have pointed to the need for fiscal capacity to do the heavy lifting,

or fresh macroprudential measures as an alternative to an outright cash rate

cut. Upcoming federal elections may present a political stumbling block.

- Base case: RBA cash rate unch, introduces a formal easing bias (maybe in SOMP

Friday), adjusts expectations, reflecting a more benign inflationary outlook.

- Dovish case: RBA cuts by 25bp, outlines need to ease further.

- Hawkish case: RBA issues a statement that is little changed from April,

placing its faith in labour mkt.