Reserve Bank of Australia policy decision & statement due the bottom of the hour – preview

The RBA announcement is coming up at 2.30pm Sydney time, which is 0430 GMT and 0030 US Eastern time.

Earlier previews are here:

• Reserve Bank of Australia policy decision still to come, an ‘on hold’ preview

• RBA preview – In May and June the Bank surprised with rate hikes … “here we go again”

• ANZ still expect a rate rise from the RBA next week, a +25bp cash rate hike
  • ANZ expects 25bps rate hike from RBA on Tues and scope for AUD/NZD rally next week
• After Australia’s better CPI data yesterday NAB still expect a July RBA rate hike
• Westpac reaffirms its forecst for a 25bp Reserve Bank of Australia rate hike on July 4

• Only one of Australia big four banks expects the RBA cash rate to remain on hold this week

TD are looking for a rate hike:

• Another line-ball call with consensus expecting no hike and OIS market pricing in an approximate 50% prob of a 25 bps hike.
• Contrary to consensus, we expect the RBA to hike.
• The labour market is too tight, upside retail sales beat for May, rebound in domestic housing prices in June and elevated household savings provides room for the RBA to continue its hike to return inflation back to target.

On the other hand, Societe Generale expect the RBA to maintain its cash rate target of 4.10%

• in our view, it would be difficult for policymakers to implement such a rate hike for three months in a row following the significant decline in monthly inflation in May.
• We maintain our base-case scenario, in which we assume a terminal policy rate of 4.35%, under the assumption that the RBA will opt to ‘pause’ with no meaningful changes in policy statement in July.
• The likelihood of the terminal rate being higher than 4.35% would increase in the event of a rate hike and/or hawkish changes in the policy statement.

—

Currently:

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