RBA to pause at 1.5% tomorrow – TDS

TD and unanimous consensus expect the RBA to pause at 1.5% tomorrow, continuing the record-breaking no-action run, suggests Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities.

Key Quotes

“The RBA saturated the airwaves last month (monthly, quarterly and semi-annual updates) but remained on message, reinforcing that stability is the RBA's #1 role in these turbulent times.”

“We doubt the policy statement will mention Westpac's +14bp out-of-cycle-mortgage hike (perhaps in the Minutes) but could remove the reference to mortgage rates being lower than a year ago. It could note that the AUD is at the bottom of its recent two-year range.”

“The Bloomberg poll median expects a flat 1.5% through to Q3 2019, a one-quarter delay, with Westpac's hike likely playing a role. OIS is now barely 30% priced for +25bp by end-2019.”