The overwhelming opinion in the market is there will be no change to cash rates at the RBA meeting tomorrow
The announcement is at 2.30pm local time (0330GMT), along with the accompanying statement
OIS markets has the probability of a 25 basis point rate cut at just 6%
–
- The Australian economy is growing below trend, as is expected to continue to do so in 2014
- The economy is expected to pick up the growth pace a little towards the end of 2014
- Inflation is not an issue (for example, today’s trimmed mean estimate from MI/TD came in at flat)
- Today we had building approvals come in a little better than expected, but the manufacturing PMI was very poor (compared with the rest of Asia, which was better)
- Last week’s capex data was not very strong – the headline was deceiving
The case can be made for further rate cuts, but they are off the table for tomorrow’s meeting; maybe in 2014.
