Highlights of the December 5 RBA decision and statement
- No change, as expected by all 28 economists surveyed by Bloomberg
- Says rising AUD would slow the economy and inflation
- Expects Australia's terms of trade to decline but remain at high levels
- Outlook for household consumption a source of uncertainty
- Forecast remains for inflation to pick up gradually
- Sees signs of easing in Sydney house prices
- Stronger labor market should mean some lift in wage growth over time
- Labor market continues to strengthen, forward looking indicators point to solid growth ahead
- Omits reference to "inflation is likely to remain low for some time"
No change in guidance: "Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."
Upbeat comments on the jobs market and a hint at wage inflation are helping to underpin AUD but nothing much is happening at the outset. The dropped reference about inflation staying low is notable and should lend a bid to the Aussie.
The market hasn't priced in any chance of an RBA hike until at least April, when the probability hits 11%.
