Responses gathered by the local Australian press (Fairfax)

(bolding is mine)

Morgan Stanley:

  • The RBA's first meeting of 2017 built on a sense of optimism that global reflation and above-trend DM growth can deliver the domestic growth transition without the need for further cuts.
  • We remain more cautious about the domestic growth outlook given housing-related headwinds and less pass-through of stronger commodity prices given a deleveraging resources sector and austerity-focused government.
  • As such, we see the RBA on hold through 1H17, but still see the next move as more likely down, rather than the hike that markets are toying with for 4Q17.

ANZ:

  • A key change to today's statement was the tone of comments around the global economy. The Bank noted that conditions had improved over recent months, with a pick-up in both business and consumer confidence.
  • The Bank also noted the increase in headline inflation rates in many countries.
  • While the outlook seemed a little brighter, the Bank, not surprisingly, acknowledged that "uncertainties remain".
  • The comments on housing were a little more circumspect. While the Bank reiterated its comments around house prices rising briskly, it noted the" stronger demand by investors" and increasing leverage. That said, the Bank continues to worry about the impact that the large increase in new apartments will have on rents (and ultimately on overall inflation) noting that rental growth is "the slowest for a couple of decades".

Citi:

  • With inertia in both its neutral guidance and its economic and inflation forecasts, the earliest possibility of a live RBA meeting most likely won't be until the May 7 board meeting, which will be after the Q1 2017 CPI result and after three more labour force reports.
  • Our central case remains no change in rates this year, but that the market is underpricing the risk of easing.
  • As the Governor notes, unemployment has crept slightly higher and there is considerable variation in employment across the country.
  • It also wouldn't surprise us if inflation proves to be stickier below the 2% to 3% target than the RBA expects.

CommSec:

  • If the Reserve Bank was to change rates in coming months, the trigger is more likely to emerge from overseas, probably a development from policies adopted by the new US Government. For instance, stimulatory policies could serve to lift the US, and the broader global economy, in turn boosting inflation. In that event, rate hikes would be more likely in Australia than rate cuts.
  • Conversely, if the fiscal stimulus doesn't emerge in the US, rather protectionist actions are advanced, that could serve to restrain global economic growth, stifle inflation pressures and cause the Reserve Bank to cut rates to protect domestic activity.

Westpac:

  • There had also some chatter about whether the RBA might start to become uneasy about this year's AUD rally: the AUD trade-weighted index closed last week at a high since May 2015. But we have been arguing that the Aussie is only just getting back towards where our fair value estimates have been pointing for many weeks - around 0.77 or a little higher - backed by last year's steep rally in commodity prices. While the RBA reworked the language around the currency slightly, the key point and the important phrases were unchanged: the AUD depreciation since 2013 has helped the economy adjust to the end of the mining boom though appreciation "would" complicate this adjustment (not "is complicating").

CBA:

  • The Governor sounds relatively upbeat on the domestic economy in general. The RBA's central forecast is for, "economic growth to be around 3 per cent over the next couple of years."
  • In addition, Lowe suggested that, "some further pick‑up in non‑mining business investment is also expected." In our view, that's a bullish statement given we are yet to observe a meaningful lift in private non‑mining investment.
  • The last RBA comment on the capex outlook was "subdued." So today's comment is a significant upgrade to what has been a weak part of the economy story.
  • Market attention now quickly turns to Thursday night when the Governor will deliver a speech at an economic forum dinner.
  • And on Friday the RBA will publish its February Statement on Monetary Policy.