RBA: Rates on hold – TD Securities

Ned Rumpeltin, European head of FX strategy at TD Securities, points out that the RBA kept rates on hold at 1.00% as they and the universal consensus expected.

Key Quotes

“In its accompanying policy statement, the RBA retained its fairly neutral stance from the July edition. Taken as a whole, a rate cut remains on the table for an upcoming meeting, but policymakers do not appear to be in a great hurry to deliver one imminently.”

“Risks remain tilted to the downside and the RBA downgraded their growth outlook for 2019 slightly. Policymakers also acknowledged that inflation may take longer to reach their target as previously hoped. The Board continues to highlight the ongoing trade disputes as a primary area of concern. These have clearly intensified in recent days and we do not expect a significant improvement in the foreseeable future.”

“We continue to expect the RBA to cut again in November, but we certainly can't rule out the chance of an earlier cut. OIS markets kept pricing for an October cut at around 90%.”