RBA policy in play – ANZ

Research Team at ANZ, narrowly favour a rate cut at today’s RBA board meeting, which will take the cash rate to a fresh record low of 1.5%.

Key Quotes

“While last week’s inflation data were broadly in line with the RBA’s forecasts, they did highlight broadly-based weak inflationary pressures. Indeed, underlying inflation is forecast to remain below the 2-3% target band for some time and below the 2.5% midpoint for an extended period.

Moreover, the tone from the July board minutes presented a more downbeat assessment of the domestic economy. In particular, jobs growth has slowed and underemployment is elevated. We also think the AUD will be a key factor, with the RBA repeatedly warning that the exchange rate could complicate the transition to non-mining led growth.”