The Reserve Bank of Australia announcement and Governor Lowe’s
accompanying Statement are due at 0430 GMT today, 3 April 2018
is no expectation of any change in the cash rate, and thus focus will
be on the Statement.
posted previews earlier here:
levels to eye here (once I posted the levels the AUD screeched to a
halt …. tee hee)
previews now, these via:
will almost certainly hold rates unchanged
will again focus on the Governor’s decision statement.
March this reiterated the central line that: “further progress
in reducing unemployment and having inflation return to target is
expected, although this progress is likely to be gradual”
- The Governor sounded a little more confident about the outlook for wages growth which “appears to have troughed”
- However, other comments in the statement and the meeting minutes suggest the Bank may be less confident about its 3¼% growth forecast for 2018. The next official update to the Bank’s forecasts is in the May Statement on Monetary Policy.
- This shift in language – if sustained in April – could be seen as
paving the way for a downward revision. Either way, Westpac expects
slower growth of 2.7% this year and the cash rate unchanged at 1.5%
throughout this year and next
- will leave the record low cash rate unchanged at 1.5%
- In the accompanying statement, the RBA’s take on the future trajectory for wages growth and labour market conditions are the key factors for markets and analysts to eyeball as harbingers of the outlook for inflation and policy settings.
- Wages data shows still feeble growth, especially in the private sector where the large bulk of workers earn their living.
- expected to continue its neutral bias with no changes in the policy rate
- Commentary from RBA members has been extremely consistent both in the minutes and speeches; they have all viewed the economy positively, and that the strong gains in jobs will lead to wage growth eventually.