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Maintains A Bullish Tone

RBA
RBA: VIEWS: Bank desk views on yesterday's RBA MonPol decision
- ANZ: The modest changes to the RBA's post meeting statement are mixed. The net
impact is one of little overall change.
- Barclays: The RBA continues to stick to a cautious bias. Against the
disinflationary backdrop, we think the RBA is likely to look through the gradual
decline in unemployment, even if unemployment rate inches closer to 5% by
end-2019. The RBA's continued cautious outlook supports our view that the rate
hiking cycle is likely to begin only in H120. We believe the RBA will wait to
see a material increase in inflation before signalling a move in interest rates.
If inflation and wage growth rise at a faster pace than we forecast, we think
the RBA could be open to moving in 2019
- Westpac: The final paragraph in the Governor's Statement is identical to the
Statement in September, emphasising that progress in reducing unemployment and
returning inflation to the target is likely to be gradual. While markets appear
to be pricing in around a 40% probability of a rate hike by end 2019, we remain
comfortable with our forecast that rates will remain on hold through '19 & '20.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com