A preview of the Reserve Bank of Australia's monetary policy meeting on February 2, 2016
The first meeting for the year! Ozzy holiday season officially over :-(
The preview is from TD (via LiveSquawk)
The RBA Board next week can still repeat its familiar stance that inflation remains within the target band and will welcome the deceleration in domestic inflation. Our expected jump in tradable inflation was merely delayed by one quarter.
After telling us to chill out last month, RBA Governor Stevens is unlikely to be fazed by the volatility that 2016 has presented so far. While entertaining front page news, we are still seeing solid activity data such as housing finance and credit, employment and non-mining exports. Sentiment (business and consumer) has been dented a touch, not smashed.
After two cuts last year in February and May to 2%, we maintain the view that the RBA Governor would prefer to hand over the reins later this year (his contract expires in September) with a still-decent cash rate of 2%. Whether the next move is up or down from there (likely) falls into the capable hands of now Deputy Governor Phil Lowe.
