Westpac with a preview of what to watch for in the Reserve Bank of Australia's Statement on Monetary Policy today

In brief (boldings mine for emphasis)

On revisions to the outlook for inflation:

  • We expect Dec 2015 and Jun 2016 to be lowered from 2.5% to 2.25%, with the midpoint rising back to 2.5% beyond that
  • Westpac cite the statement accompanying the policy decision on Tuesday, where "the RBA noted that inflation was expected to remain within the target band but may be a little lower than earlier expected. This suggests a revision to the inflation forecasts."

On revisions to the outlook for GDP growth:

  • Westpac sees "the midpoint of the Dec 2016 growth forecast remaining at 3.0%, ... It is however possible that the RBA revises its GDP forecast to centre around 2.75%, in line with new trend growth'
  • Westpac cite: the RBA "had confirmed a somewhat more confident view around the growth outlook, citing business surveys, employment and economic conditions"

On RBA monetary policy implications:

  • "our view that there will be no cut in December"
  • On "possible that the RBA revises its GDP forecast to centre around 2.75%, in line with new trend growth." .... "This would not signal an immediate cut."
  • On "a forecast of 2.5%, which we see as unlikely" ... this would suggest a possible 25bp reduction of rates in February ... "given the next actual GDP print comes the day after the December meeting."