Reserve Bank of Australia Governor Philip Lowe will be speaking from 2330GMT
- Appearing before parliament (House of Representatives' Standing Committee on Economics) in a semi-annual testimony
- He will speak from a prepared text
- A Q&A will follow
- The whole thing will last for about 3 hours!
Lowe will maintain his cautiously sanguine outlook and will say nothing to frighten local markets. The RBA is on hold and in no rush at all to change rates either way.
This via Commerz overnight on the AUD (bolding mine, and I concur):
Regardless of a falling unemployment rate, the Reserve Bank of Australia (RBA) will probably want to wait before hiking interest rates for now.
- Wage growth remains subdued and at +2.1% yoy in Q2 it remains below the levels of 3.5-4% seen before the financial crisis
- Moreover the RBA still sees spare capacity in the market.
Despite the solid growth inflation will also rise only slowly.
The AUD has remained in a modest range and has depreciated by approx. 7% against USD since the beginning of the year.
In view of the many positive developments the RBA comes to the conclusion in its latest monetary policy report that at some point higher interest rates will probably be necessary.
- Short term it does not see any reason for them though as there are still many vagaries and risks: the Chinese economy, the global trade conflict, weak metal prices. Unless economic data over the coming weeks significantly surprises to the upside the RBA will stick to its wait and see approach for the foreseeable future.
As a result the AUD will only have limited upside potential against the USD too.
