From MNI's Sophia Rodriguez (a must read on the RBA, follow on Twitter @srodrigues45)

In (very) brief:

  • Prospects of a delay in the first Federal Reserve rate hike and concerns over slowing Chinese growth have increased the Reserve Bank of Australia's preparedness to lower the cash rate further
  • Meeting next week may be too early for such a cut
  • But clear signs Chinese growth slowing ... if reflected in continued fall in commodity prices ... then there is a possibility the RBA may cut next week
  • RBA preference, however, would be to wait for the outcome of the Fed's September meeting
  • Any signs Fed hike is to be delayed until 2016 "significantly raises the chance of a RBA cut in the next few months"

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Rodriguez adds on the Q2 capex data (due tomorrow):

  • Expectation the data may surprise to the downside ... therefore a weak number may not necessarily increase chance of a cut
  • RBA thinks it may take some time for capex intentions for the non-mining sector to improve ... best it can do is wait for a few more months for signs of recovery