RBA decision coming up, previews – on hold but hawkish

The Reserve Bank of Australia statement is due at 0430 GMT / 0030 US Eastern time / 1430 Sydney time.

ANZ see an on hold decision:

• While we don’t expect the Board to explicitly discuss a rate hike, the communication on Tuesday will be more hawkish than March
• We continue to see the first rate cut of a shallow easing cycle in November although, as we noted following the CPI , there is a risk this gets pushed into next year.

NAB is also expecting the RBA remain on hold:

• Low unemployment and hot inflation should see a tilt back towards a tightening bias after what many interpreted was a neutral bias at the March meeting
• Soft activity growth and a tighter for longer forecast assumption are some offset for the RBA’s inflation forecasts, but the reluctant hikers are once again challenged by the data.

Earlier previews:

• Reserve Bank of Australia preview – more hawkish

• RBA decision due Tuesday, 7 May 2024 at 2.30 pm Sydney time – hawkish hold?

• RBA meeting – preview – Cash rate to remain unchanged
• Central banks are still on the agenda this week
• Australia- inflation a bit higher than expected, RBA on hold

Outlier call for a rate hike:

• Capital Economics are forecasting a Reserve Bank of Australia rate hike
• RBA meet this week – “History suggests a rate increase is plausible”

The current cash rate is 4.35%, holding above the inflation rate to try to drive CPI towards the 2 to 3% band, with 2.5% and agreed target between the Bank and government.

This article was written by Eamonn Sheridan at www.forexlive.com.