Earlier posts with previews of the Reserve Bank of Australia meeting are here:
- RBA meet today - preview and where to the Australian dollar
- Reserve Bank of Australia meet on March 5 - preview
- Big two days coming up from the RBA - meeting then Gov Lowe speech - preview
More, this via SG:
meeting is unlikely to reveal any substantial shifts in its assessment of the economy or the likely course of monetary policy. And interest rates are practically certain to be on hold.
- by the time of the meeting some important further partial data will have been released which could have shifted expectations.
assessment of the international environment is also unlikely to have changed much
- At the margin, however, we would expect any shifts in language to be towards a slightly less downbeat assessment.
Economic indicators for Australia, meanwhile, have been mixed. On the upside,
- the labour market
- Consumer sentiment
- sliding house prices. On that topic, while prices continue to decline, there are tentative signs that the rate of descent is moderating, and auction clearance rates have clearly recovered. Nevertheless, residential construction activity is bound to decline markedly over the coming several years.
- Private capital expenditure in 4Q18 also surprised on the upside, although the other "partial" for investment in GDP, construction work, was very weak.
On the downside,
- headline wage cost index was slightly weaker than expected
- Retail sales were very weak in December
- housing-related credit continues to slow sharply
Barclays:
- We expect the RBA to be on hold ... and maintain balanced forward guidance between probabilities of the next move being a hike or cut
Further ahead from Barclays:
- Governor Lowe speaking on the housing market (Wednesday).
- The market is already positioned for dovish guidance, with 22bp of cuts priced over the next year, so the bar to surprise on the dovish side is high.
Scotia:
- Reserve Bank of Australia (not) expected to adjust their policy rate of 1.5%
