Expect Dovish RBA Statement, Refined Forward Guidance

By Sophia Rodrigues

Published On 05 Nov 2019 , 12:00 AM

It is very unusual for both market and economists to be strongly expecting a particular outcome (hold) for a RBA board meeting when there are strong arguments for both cut and hold. In the end, it is entirely likely the RBA will meet expectations and leave the rate unchanged at 0.75% today. However, it will be "dovish hold" given there are still strong reasons for RBA to lower the cash rate again, and just last week Governor Lowe said the RBA is prepared to ease monpol again if needed. To signal an extended hold, the RBA would have to conclude that lowering the cash rate below 0.75% is not in the collective interest of Australians. I doubt the RBA can make such a conclusion now. So I am expecting a dovish statement and maybe some attempt at refining forward guidance.

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