Today’s RBA meeting will keep interest rate policy steady but it will be interesting to see what the RBA has to say in it’s statement on 3 big issues;
- Inflation has been under control but with house prices rising and the cost of imports rising due to the lower AUD, the RBA might just signal that it’s starting to become even more cautious on this front?
- There have been no shortage of headlines regarding employment in Australia with big car manufacturers, the iron ore industry, as well as Qantas all signalling significant job cuts. If the RBA stresses the jobs issue then policy is most likely to stay easy;
- Finally the value of the AUD will cause plenty of debate with many arguing that we are now back at more neutral levels especially against the European currencies and our Asian neighbours. It might be the lack of any AUD mention which is the most interesting factor?
All told, we should get plenty of analysis (but hopefully no paralysis).