As expected.
- Says most prudent course is period of rate stability
- Sees reasonable prospects of global growth pick up this year
- Sees growth strengthening beyond short term
- Says EM conditions considerably more challenging than yr ago
- Sees mid-term growth helped by low rates, lower AUD
- sees slightly firmer consumer demand
- AUD decline, if sustained, will assist in balanced growth
- Growth in wages has declined noticeably
- Dec. Q inflation was higher than expected
- Inflation somewhat higher than forecast, within target
- Inflation in part due to faster pass-through of lower AUD
- Sees growth below trend for a time. unemployment rising
- Monetary policy remains accomodative
- Data foreshadows solid expansion in housing construction
Statement by Glenn Stevens, Governor: Monetary Policy Decision
–
A neutral statement, bolding is mine:
In the Board’s judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
Doesn’t come much more neutral than “the most prudent course is likely to be a period of stability in interest rates.”
–
AUD/USD was marked up immediately and has stopped pretty much on overnight highs. I’ll try to get info on the orderboard as it now stands and post it. Note there is no reference in the statement to the AUD being “uncomfortably high”. I was expecting this to be dropped after the good size fall we have had.
–
ADDED AT 0614GMT: RBA decision to leave rates unchanged and move to a neutral monetary policy bias – what are the bank analysts saying?
