VIEW: Westpac believe that "this Statement is...>

RBA: VIEW: Westpac believe that "this Statement is a little more +ve than we

have seen in the past, mainly through the linking of rising house prices to a

potential lift in spending & residential construction. It also continues to

emphasise that the Board is prepared to be patient, is monitoring developments,

that policy has long & variable lags, and is prepared to ease "if necessary". If

we were expecting a policy move over the next month, then this Statement would

raise some questions. However, our f'cast that there will be a cut at the Feb

meeting looks much safer. Over the course of the next few months, there will be

a clear test of the RBA's view that the unemployment rate will hold steady.

There will also be further evidence around the strength of the consumer with the

national a/c's to be released tomorrow as well as 2 more retail sales reports.

The response of the AUD to any confidence that the RBA will be on hold in Feb

will also be important. We assess that 1 of the factors behind the consistently

low AUD is the exp. that the RBA will continue down its easing path. Overall,

despite this emphasis on "monitoring" & the slightly more upbeat discussion on

the Aus econ, we still feel confident that a rate cut in Feb will be delivered."