This handy summary is via eFX
The following are brief expectations for the RBA November 7th policy statement as compiled from the related notes of 10 sell-side strategy and research desks.
Overall,the consensus expects the RBA to keep its policy rate unchanged at 1.50% and reiterate its neutral stance.
On AUD front,there seems to be some interest by some strategies desks this week in positioning ahead of the meeting in selling AUD vs CAD* and NZD*, and in buying AUD vs USD.*
BofAML Research: The RBA board meets next week and will likely keep rates on hold for the 15th month, particularly in light of soft 3Q inflation data. The CPI print was disappointing in more ways than one. The Bank lacks a narrative to signal an eventual move to a more normal rates structure, at this stage, and front-end rates are set to hold ranges with monetary policy sidelined. This has made AU rates more attractive for carry strategies, keeps curve steepening in train and should remove somesupport for the AUD.
ING Research: Another disappointing jobs report puts the pressure on the RBA when they meet this week (Tue). Certainly, the economic data of late has been fairly lacklustre, which lends itself to a slightly more cautious RBA tone. The fallout in the AUD from a dovish RBA is likely to be limited given that the curve has already pushed back expectations for a rate hike to Nov-18. Our economists see this as slightly pessimistic - especially under an environment of synchronised global growth; we have a 2Q18 rate hike tentatively pencilled in. On the surface, a hawkish RBA re-pricing would be AUD positive - timing when this happens is important.
Deutsche Bank Research: We see dovish risks from the RBA meeting and SoMP this week in the wake of recent softness in retail sales and inflation. The risk is that RBA postpones the forecast return to trend growth once again, casting doubt on the 35bps of tightening still priced for next year.
Barclays Research: We expect the RBA to keep rates unchanged and reaffirm its positive outlook on economic activity. However, the Board may flag lingering concerns around low inflation following the weaker-than-expected Q3 CPI print and sluggish consumer spending. Nominal retail sales were flat m/m in September after two consecutive declines, suggesting that consumer spending remains anemic despite improving labor market conditions. We continue to see AUD underperformance vs. G10 currencies over the medium term amid USD weakness in 2018.
Credit Agricole Research:The RBA is widely expected to leave rates on hold and, following a soft Q3 inflation reading, the market is also looking for a dovish RBA decision statement and downward revisions to the RBA's inflation forecasts in its Statement on Monetary Policy (SoMP). Prior to the inflation reading, the market saw potential for a rate hike by October 2018 and currently does not have a hike fully priced at all for 2018. We continue to think that this pricing is excessive, particularly given that underlying inflation is running at 1.85% and only modestly below the mid-point of the RBA's 1.5-2.5% forecast range for H217 as outlined in its August SoMP. So we expect that if there is a downward revision to the RBA's inflation forecasts it will be minor.
NAB Research: As for the RBA Meeting, it is likely the post meeting statement will be fairly neutral. Since the last meeting there have been two diverging trends. The first has been a continuation of very strong employment growth that has now seen the unemployment rate fall to 5.5%. The second has been the general weakness in nominal retail sales combined with a subdued prices outlook as reflected in Q3 CPI. How the RBA Staff reconcile the divergence in their forecasts will be key to the outlook and the Board will be presented with updated forecasts on the economy at this meeting ahead of them being published on Friday in the November Statement on Monetary Policy.
ANZ Research: The RBA meeting this week comes at a time where recent pricing has become too bearish on the domestic economy. While the recent inflation and retail trade figures did disappoint, we do not think that either of these will drive a shift in the RBA's tone as the broader growth environment in Australia remains solid.
BNPP Research: This week, both the Reserve Bank of New Zealand (RBNZ) and the Reserve Bank of Australia (RBA) meet. The market continues to expect the RBA to remain on hold until H2 2018. The RBNZ meeting may be more interesting after the NZD's significant depreciation recently.
Westpac Research:The Reserve Bank Board meets next week on November 7. The Board is certain to keep rates on hold.In previous years November has been a very popular month for changing rates but not this year. Rates have not been adjusted in November since 2011. However in the six years from 2006 to 2011 there was a rate move at every November Board meeting.
HSBC Research: We expect the RBA to leave its forecasts for growth and inflation largely unchanged from those published in August. ..Since the last statement the AUD has fallen modestly which may put some upwards pressure on the RBA's headline CPI forecasts. However, we doubt the central bank will feed this through to its underlying inflation forecasts.
