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30 Jun 2014
RBA will leave rates on hold but communication may change - BAML
FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch explained that they expect the RBA to leave rates on hold this week, but said it seems increasingly likely that there will be subtle changes to its communications at tomorrow's meeting.
Key Quotes
"The RBA's recent minutes moved to a slightly more cautious tone, from what had been a relatively upbeat assessment of the outlook. Although we forecast it will hold rates unchanged for an unprecedentedly long period, there is scope for shifts in language to convey a somewhat less optimistic tone."
"In our view, this may occur as the activity data flow softens over coming months. Yet markets may be disappointed by the RBA's lack of change in language on the exchange rate, which we do not think will be altered unless a significant and sustained move in either direction occurs."
Key Quotes
"The RBA's recent minutes moved to a slightly more cautious tone, from what had been a relatively upbeat assessment of the outlook. Although we forecast it will hold rates unchanged for an unprecedentedly long period, there is scope for shifts in language to convey a somewhat less optimistic tone."
"In our view, this may occur as the activity data flow softens over coming months. Yet markets may be disappointed by the RBA's lack of change in language on the exchange rate, which we do not think will be altered unless a significant and sustained move in either direction occurs."