VIEW: ANZ: April An ‘On Balance’ Pause; May Live

ANZ note that “the RBA's April Board meeting Minutes suggest to us that the decision to pause was a relatively close one - with a case able to be made for both an increase in interest rates and a pause. It also suggests that the May meeting is live, with the Board in a position to be persuaded either way based on the balance of the data and the updated set of forecasts they will receive at that meeting.”

• “While we expect only one more rate increase from the RBA (25bp in August), risks remain tilted towards a higher terminal rate. An upside surprise to our Q1 trimmed mean CPI forecast would increase the probability of an increase in May. These Minutes would tend to support that view - and indeed suggest that risks are tilted to a shorter pause than we currently anticipate.”