Reserve Bank of Australia Announcement due at 2.30pm Sydney time (0430GMT)
No change to rates is unanimous expectation
I posted some previews earlier:
- RBA preview: "Certain to hold rates steady"
- Australia - Likely boost to infrastructure spending another reason for RBA on hold
- Australia - RBA announcement due today, here is a preview
This now, via eFX:
The following are brief expectations for the RBA May meeting statement as compiled from the related research reports of 7 major banks. Overall, they expect the RBA to stay on hold and to maintain a neutral to a slightly dovish stance.
Credit Agricole CIB Research: The AUD/USD remains well above its interest rate differential, but needs something to jolt it into correcting. The RBA is not likely to be the source of this correction. The RBA will be on hold this week and likely continue to indicate that it is comfortable staying that way for a long time.
TD Research: The market expects the RBA to remain on hold but will also be closely watching the forecasts and language. We expect a neutral tone, but a downgrade in the forecasts could weigh on AUD.
Morgan Stanley Research: The RBA should remain dovish. The AUD stays on our top selling list as tighter financial conditions in China are expected to spill over to Australia. The market is still long the AUD, which we think needs to come down, supported further by depressed iron ore prices.
BofAML Research: The Reserve Bank of Australia Board meets this week and should remain firmly on hold with market pricing seeing little impetus to alter guidance anytime soon...The collapse in iron ore prices in April foreshadows harder times ahead for the AUD. If sustained, it means the equilibrium term will reverse weaker in 2Q. We continue to expect AUD to reach the low 0.70s in 2H against this potential backdrop.
NAB Research: No change is unanimously expected...There's currently no monetary policy bias built into the RBA futures curve for this year. Last week's CPI revealed somewhat higher than expected headline and underlying inflation, but the emphasis on "somewhat". And so if there's any recognition that last week's CPI might have done anything more than a tweak to the starting point, that could be material if it lessens the (slim) chances of any more easing.
Westpac Research: The Board is certain to hold rates steady.In fact Westpac has argued consistently since May last year that, after an expected cut in August 2016, rates would be held steady for the remainder of 2016 and 2017. Earlier this year we extended that view with the expectation that the Bank would also hold rates steady through 2018.
Barclays Research: We expect the RBA to maintain its growth and inflation forecasts, but exhibit more confidence around its projections and also speak more around risks in the housing market.
