RBA to deliver further easing on November 3 – RBC

Analysts at Royal Bank of Canada (RBC) offer a sneak peek at what to expect from Tuesday’s Reserve Bank of Australia (RBA) monetary policy decision due to be announced at 0330 GMT.

Key quotes

“Q3 CPI ... adds pressure on the RBA to deliver further easing at its next board meeting on 3 Nov, especially given its recent shift in focus to actual rather than forecast inflation.” 

“The 19th consecutive quarter or almost 5 years that annual core inflation has been below the floor of the 2-3% target.” 

“Given the degree of excess capacity amid an uncertain recovery, rising labor market slack and persistent low productivity, we think core inflation is likely to edge towards 1% in the coming quarters with a disinflationary pulse remaining.” 

"This will keep pressure on the RBA to deliver further easing beyond the next board meeting where expectations are higher for multiple measures.”