VIEW: Westpac write the "Statement strongly.....>

RBA: VIEW: Westpac write the "Statement strongly emphasised the importance of

the labour market, "it recognised that there was still spare capacity in the

economy & a further improvement in the labour market was likely to be needed for

inflation to be consistent with the target. Given this assessment, the Board

will be paying close attention to developments in the labour market at its

upcoming meetings". As this comment emphasises, the 2nd condition nominated in

the April minutes is yet to be fulfilled. It is also important from a timing

perspective to note the term "upcoming meetings". That suggests to us that a

common view held by some economists of a move in June can be ruled out. This

condition around the labour market will need more than one employment report to

establish a trend We feel that this statement fits well with our view that the

next move will be a cut in August. Firstly, we expect that the June quarter

inflation report will print trimmed mean growth of around 0.4%. Recognition that

inflation will hold below the bottom of the 2-3% target band for '19 & '20 will

signal the need for further policy easing. We also expect that developments in

the labour market over the next three months will disappoint the RBA."