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1 Jun 2015
RBA preview: No material changes expected - BofA
FXStreet (Bali) - Alex Joiner, Australia Economist at Bank of America Merrill Lynch (Australia), expects that RBA rates will be on hold and there will be no material changes to its communications on Tuesday.
Key Quotes
"The RBA meets this week but we expect that rates will be on hold and there will be no material changes to its communications. This is not to say that this week’s investment intentions data would not have disappointed the RBA."
"But we think it will likely reserve judgment, and resist commenting, on the broader investment outlook until seeing additional activity data and consulting the business sector via its liaison program."
"We expect the RBA to maintain a soft easing bias for some time. But this will likely be implied by the commentary on the outlook rather than any forward guidance which the RBA now could tell us will no longer be forthcoming. This in itself likely says something about how uncertain the economic outlook itself is."
"And it seems clear to us that the RBA is wary of getting ‘boxed in’ to any particular course of action. Market pricing continues to reflect this soft bias which is appropriate in the short term in our view."
"This outlook will likely be shaped by many of the key data releases next week. The highlights being Q1 balance of payments and GDP reports. And on higher frequency activity data from the Statistician: building approvals; international trade; and retail sales for the month of April."
Key Quotes
"The RBA meets this week but we expect that rates will be on hold and there will be no material changes to its communications. This is not to say that this week’s investment intentions data would not have disappointed the RBA."
"But we think it will likely reserve judgment, and resist commenting, on the broader investment outlook until seeing additional activity data and consulting the business sector via its liaison program."
"We expect the RBA to maintain a soft easing bias for some time. But this will likely be implied by the commentary on the outlook rather than any forward guidance which the RBA now could tell us will no longer be forthcoming. This in itself likely says something about how uncertain the economic outlook itself is."
"And it seems clear to us that the RBA is wary of getting ‘boxed in’ to any particular course of action. Market pricing continues to reflect this soft bias which is appropriate in the short term in our view."
"This outlook will likely be shaped by many of the key data releases next week. The highlights being Q1 balance of payments and GDP reports. And on higher frequency activity data from the Statistician: building approvals; international trade; and retail sales for the month of April."