RBA: on hold but with an easing bias - ANZ

Analysts at ANZ explained that, as widely expected, the RBA left the cash rate unchanged at 1.5% for the third month in a row.

Key Quotes:

"The main change to the press release was the inclusion of a discussion around the new economic forecasts to be published in the Statement on Monetary Policy on Friday, which were said to be “little changed”. Previously, these forecasts were not published or commented on in the post-board meeting statement. In our view, this change likely marks a shift in communication strategy under the new Governor, Philip Lowe.

We continue to think that rates are on hold, but with the RBA retaining an easing bias given the weak inflation outlook. With little material change to the tone in the RBA’s statement, we see monetary policy on hold for the time being as the Bank gauges the impact of the rate cuts in May and August and watches closely developments in the housing and labour markets, as well on ongoing inflation dynamics.

Fed to prep market

We expect no change in policy from the FOMC overnight. We also expect the central bank to tweak its language such that it will be clear to the market that December is ‘live’."