Westpac says the signal aligns with its forecast that the RBA is likely to adopt an easing bias at its May meeting
According to Westpac, the revised last sentence in the RBA's policy statement suggests that an interest rate cut is becoming more likely and that the adjusted language appears to be a clear intention to signal that policy is more 'live' than it has been since Lowe's appointment in September 2016.
For some context, as noted earlier, the change to the last sentence/paragraph is the first by the central bank since February 2018.
Westpac also retains its forecast that the RBA will cut rates in August on building evidence of a labour market slowdown. On the budget announcement later, they note that any boost to disposable income from tax cuts will be of some assistance to the economy but is unlikely to sufficiently offset the negative wealth effect from falling house prices and weak wage growth.
I certainly agree with them on that part and the fact that Australian bond yields are also trading near record lows still is a tell that markets aren't confident about the economic outlook improving as well.
