RBA minutes: Labour market somewhat weaker than expected

The minutes of the latest RBA meeting when interest rates were held unchanged at 1.5% have been released, noting that labour market somewhat weaker than expected, keeping wage growth low.

As per the current policy course, the RBA minutes notes: "In considering the stance of monetary policy, members noted that recent data had provided more confidence that global growth was rising and that the pick-up was broadly based across both developed and emerging economies."

"Growth in both global trade and industrial production had increased and indicators of global consumer and business sentiment had been above average. Further reductions in spare capacity were expected in the major advanced economies. However, various policy, financial and geopolitical risks would still need to be closely watched" the RBA added. 

In terms of inflation, the RBA notes: "Headline inflation had increased in most economies, mainly reflecting higher oil prices over the first part of 2016. Members noted that, while the effect of higher oil prices might dissipate, further reductions in spare capacity in the major advanced economies could be expected to see a lift in inflation."

The RBA expanded further on the CPI: "Headline inflation was expected to pick up over 2017 to be above 2 per cent. However, the rise in underlying inflation was expected to be more gradual; wage growth and broader measures of labour cost pressures remained subdued and competition in the retail sector continued to be strong."

On the Aussie, the RBA notes: "The depreciation of the exchange rate since 2013 had assisted the economy during this transition; an appreciating exchange rate would complicate the adjustment process."

Additional headlines via Reuters

Judged steady rates consistent with growth and inflation targets

RBA board judged labour and housing markets "warranted careful monitoring" in coming months

Labour market somewhat weaker than expected, keeping wage growth low

Household consumption growth little weaker than expected in early 2017

CPI expected to pick up above 2 pct in 2017, core inflation to rise more slowly

RBA minutes repeats a rising in A$ would complicate economic adjustment

GDP likely expanded at moderate pace in q1, impact of cyclone Debbie unlikely to be large

Commodity prices to boost national income in q1, but terms of trade to decline from here

RBA minutes saw rising risks in household debt, housing markets

Tighter regulations to reinforce prudent lending, curb interest-only loans

Would take some time to assess effects of new rules, ready to do more if needed

Recent data provide more confidence that global growth accelerating broadly

Chinese economy appeared to have strengthened; protectionist policies in u.s. still a risk