In the view of analysts at TD Securities (TDS), the Reserve Bank of Australia (RBA) is likely to bring a halt to its tightening cycle when it meets to decide on its monetary policy next Tuesday.

Key quotes

“The RBA hit the pause button last month, and we expect it to leave the cash rate target unchanged again as the Bank would prefer more time to assess the effects of the rapid rate hikes to date.“

“The continued moderation in monthly CPI prints and lower Q1 trimmed mean (RBA's core inflation measure) give room for the Bank to head for an extended pause.”

“Curve has repriced the RBA and dragged the AUD along with it. But, risks around equity sentiment and US-centric events leave AUD vulnerable still, particularly against crosses where monetary policy is still at play (like EURAUD and AUDNZD).”

“RBA OIS strip points to another on-hold decision, with only 2bps priced for the May meeting. Upside risks to inflation may pressure the Bank to hike in the months ahead, and we like Aus bond flatteners vs US steepeners.”