The RBA to keep rates unchanged for the 19th consecutive meeting

• The base rate has been at 1.5% for 18 consecutive months. That is the longest stretch of connectivity
• The last time the RBA moved was in August 2016. The last time the RBA raised rates was in late 2010
• Focus will be on the monetary policy statement and the comments on growth, labor markets and inflation.  
• The RBA will release its quarterly Statement on Monetary Policy on Friday and what they say today will be a prelude of what to expect then.
• In April, the RBA said economic growth will be faster in 2018 versus 2017.  GDP grew by 2.4% in 2017
• Westpac chief economist Evans expects that if the bank tones down their language for growth, the central bank will likewise lower 2018 growth in their Statement of Monetary Policy to 3.0% from 3.25%
• CPI inflation came in weaker than expected last week at 1.9% vs 2.0% expected. The Trimmed mean was higher however at 1.9% vs 1.8% expected.  

Highlight from the last statement:

• Global economic conditions picked up further over the course of 2017, and indications are that strength continued into 2018
• The recent run of activity data has been in line with, or a little stronger than expectations
• The labour market has been particularly strong.
• GDP growth is expected to increase over the period ahead, to be a little above 3 per cent over both 2018 and 2019
• Prospects for business investment have improved noticeably over the past few quarters
• The drag from mining investment has been waning and is likely to end sometime this year. 
• Non-mining business investment grew more quickly over 2017 than over the previous couple of years, and faster than was expected a year ago. 
• Household consumption growth was weak in the September quarter but indications are that it recovered in the December quarter. Consumption growth is expected to be a little above its decade average in the period ahead.
• Employment growth was strong over 2017, and most of the jobs created were full time. The unemployment rate trended down over the year. Forward indicators of labour demand suggest that employment will continue to expand in coming months, though not at quite as rapid a rate as seen recently. 
• Wage growth remains subdued and is forecast to increase gradually.
• Inflation remains low and this is likely to continue for a while yet. Both CPI and underlying inflation were a little below 2 per cent over 2017.
• Slow growth in labour costs has weighed on price growth, particularly for retail goods and some market services. 
• The forecasts for inflation are similar to those published in the November Statement. Inflation is likely to increase gradually over time, as the economy and labour market strengthen. Underlying inflation is expected to be around 2¼ per cent by mid 2020.