September 24, 2024 at 05:00AM
Imagine if the RBA did actually look like that. Sadly, the iconic signage area has even been converted to a bus stop and covered in scaffolding. Le sigh. Anyway, the Australian central bank is going to be announcing its latest policy decision later. But barring any major surprises, it should be a non-event.
Inflation continues to remain sticky and that is the main problem for the RBA. They’re not in a comfortable position to lower rates and even warned on potential upside risks to inflation in their August statement here.
The expectation is for the language then to remain broadly unchanged. The key thing communique will be of course the line that the central bank is “not ruling anything in or out on next policy steps”. And of course that “policy will need to be sufficiently restrictive until confidence returns that inflation is moving sustainably towards the target range”.
Traders are pricing in ~99% odds of no change to the cash rate today. But looking out to the final decision in December this year, traders are pricing in ~16 bps of rate cuts by then. And looking further out to May next year, traders are seeing a total of ~73 bps of rate cuts currently.
This article was written by Justin Low at www.forexlive.com.
