RBA: Cash rate unchanged at 1.5% - TDS

Analysts at TD Securities note that the RBA left the cash rate at 1.5% as widely expected, the statement including observations about the outlook, and noted the drought impacting the farm sector (fiscal policy is dealing with this).

Key Quotes

“Ahead of the RBA SoMP on Friday, the inputs into the forecasting process cancel each other out, and hence no impetus to change GDP or CPI on that basis: likely to be AUD at $US0.74, TWI 63 and oil at $US74bbl (compared with May assumptions of $US0.75, 62 and $US71bbl respectively).”

“We expect a quarter-point bump in Q2 GDP from 2.75% to 3%, via base effects of the stronger Q1 print.”