The Reserve Bank of Australia announces its monetary policy decision - 2 October 2018
- Prior decision 1.50%
- Low rates are supporting the economy
- GDP growth to average a bit above 3% in 2018, 2019
- Household consumption remains a source of uncertainty
- Outlook for labour market remains positive
- Business conditions are positive
- Credit conditions tighter than they have been for some time
- Housing markets have slowed in Sydney, Melbourne
- Expects inflation to be higher in 2019, 2020
- Wage growth remains low, likely to continue for a while
- AUD remains in range of past couple of years
- AUD has fallen against USD, along with most other currencies
No change in the cash rate as expected and the language isn't that much different either. The two key sticking points remain which are household consumption and wage growth. The assessment on the economy also hasn't changed so this is pretty much sticking to the status quo by the RBA.
AUD/USD "popped" a little on the decision rising to a high of 0.7238 but is essentially unchanged now at 0.7230. I don't see anything to be bullish on the aussie but I guess the fact that the RBA hasn't abandoned all hope on hiking rates just yet is helping a little. But in the big picture, it's very much a non-event here.
