RBA preview - "justification for a further cut" … but they won't.

The Reserve Bank of Australia interest rate announcement and statement from Governor Lowe is due at 0330GMT

Nearly everyone expects the Bank to leave the cash rate unchanged (currently 0.75%). Out of the 33 analyst opinions collated by Bloomberg only 6 expect a cut (to 0.5%). ING do (I posted their preview yesterday) along with Barclays, Deutsche, Credit Suisse and Scotia a local securities firm

Via Daiwa:

Despite concerns about

the impact of the bushfire crisis not least on confidence and tourism,
the impact of the coronavirus on Chinese demand,
and still subdued inflation,

the stronger employment report a couple of weeks ago saw expectations of an imminent rate cut fall considerably.

And, while there would be justification for a further cut - the RBA is likely to continue to forecast sub-target inflation across the projection horizon when it publishes its quarterly Monetary Policy Statement on Friday - on balance, the RBA will likely want to wait a little longer for further more information about the various impacts on activity and inflation from recent shocks before easing policy further.

To contrast, Scotia do expect a cut:

Most expect the RBA to stay on hold at a policy rate of 0.75% aided by recently firmer inflation figures, but the freshest shocks to the outlook include fires primarily across the southeast and the coronavirus.
new information
the larger potential impact arrives via the outlook for export prospects to China and the surrounding region plus the impact upon Australia's terms of trade given its significant reliance upon commodities

The Reserve Bank of Australia interest rate announcement and statement from Governor Lowe is due at 0330GMT

As I said yesterday on the post with ING's reasoning calling for a rate cut, it makes sense to me. But given the timidity of the RBA under its current leadership I'm in the on hold camp.

Earlier previews: