A preview of the RBA policy meeting and decision today from Goldman Sachs:

  • "We see a solid case for a -25bp rate cut given a likely downgrade to the RBA's own growth forecasts later in the week, confirmation of still benign inflationary pressures in last week's 1Q2015 CPI report, relatively low commodity prices, and a still elevated AUD. That said, we acknowledge that a speech by the RBA Governor last week seemed to imply a degree of reluctance to continue the easing cycle given related risks over the long run - including in the property market"
  • "As a result, there is a material risk that the RBA defers the next step lower in rates - possibly until there is greater visibility on fiscal policy settings following the 12 May Budget"
  • Either way, we have high conviction that rates will move lower again in the coming months - even if the exact timing of the next move is somewhat less clear"

via eFX