The Reserve Bank of Australia’s minutes for the December meeting which fell the day before Australia’s soft Q3 GDP report has been released.
RBA minutes
- RBA MINUTES: BOARD AGREED IMPORTANT TO REASSESS ECONOMIC OUTLOOK AT FEB MEETING
- 16-Dec-2019 18:30:01 – RBA: BOARD FELT IT WOULD BE CONCERNING IF OUTLOOK FOR ECONOMY, JOBS DETERIORATED
- 16-Dec-2019 18:30:01 – RBA: HAD ABILITY TO ADD FURTHER STIMULUS IF REQUIRED, READY TO EASE AGAIN IF NEEDED
- 16-Dec-2019 18:30:01 – RBA: ECONOMY APPEARED TO HAVE REACHED A GENTLE TURNING POINT
- 16-Dec-2019 18:30:01 – RBA: BOARD NOTED POLICY WORKED WITH LONG AND VARIABLE LAGS
- 16-Dec-2019 18:30:01 – RBA: EXTENDED PERIOD OF LOW RATES NEEDED TO MEET EMPLOYMENT, INFLATION TARGETS
- 16-Dec-2019 18:30:01 – RBA: PERSISTENTLY LOW GROWTH IN HOUSEHOLD INCOMES A SOURCE OF CONCERN
- 16-Dec-2019 18:30:01 – RBA: CURRENT WAGE GROWTH NOT FAST ENOUGH TO REACH INFLATION, CONSUMPTION GOALS
- 16-Dec-2019 18:30:01 – RBA: RATE CUTS HAD BEEN WORKING BY LOWERING BOND YIELDS, A$ AND MORTGAGE PAYMENTS
- 16-Dec-2019 18:30:01 – RBA: BOARD JUDGED STIMULUS FROM RATE CUTS OUTWEIGHED ANY NEGATIVE IMPACT ON CONFIDENCE
- 16-Dec-2019 18:30:01 – RBA: CONSUMERS INCREASINGLY GLOOMY ON ECONOMY, MEDIA COVERAGE ALSO MORE NEGATIVE
- 16-Dec-2019 18:30:01 – RBA: CONSUMERS MORE UPBEAT ON OWN FINANCES, WHICH CORRELATES BETTER WITH CONSUMPTION
- 16-Dec-2019 18:30:01 – RBA: RECOVERY IN HOME PRICES EXPECTED TO BE POSITIVE FOR CONSUMPTION OVER TIME
- 16-Dec-2019 18:30:01 – RBA: HOUSE PRICES CONTINUED TO STRENGTHEN, BUT BUILDING TO FALL FOR SEVERAL MORE QUARTERS
- 16-Dec-2019 18:30:01 – RBA: LIAISON WITH RETAILERS POINTED TO FLAT SALES GROWTH IN OCT AND NOV
- 16-Dec-2019 18:30:01 – RBA: SOME DOWNSIDE RISKS TO GLOBAL ECONOMY HAD RECEDED
Casting minds back, the statement on the day where the Board held steady at 0.75% repeated that, “the Australian economy appears to have reached a gentle turning point” and added that, “the long and variable lags in the transmission of monetary policy” which argued for a steady hand from the bank.
Analysts at Westpac explained that the minutes were expected to expand an upbeat stance. “One key line to watch for is whether the minutes repeat November’s line “a case could be made to ease monetary policy at this meeting,” even though the arguments rejecting a cut were then listed.”
Description
The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.
FX implications
- Support levels: 0.6865 0.6830 0.6800
- Resistance levels: 0.6900 0.6935 0.6970 – (0.6935 is key for bulls)
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AUD/USD Forecast: Declines limited as long as above 0.6865
In an early forecast, Valeria Bednarik, the Chief analyst at FXStreet explained that AUD/USD was neutral-to-bullish in the short-term, as, in the 4-hour chart, it held above the 0.6865 support level and that the chances of a bullish extension will increase on a clear advance beyond the 0.6930/40 price zone, where the pair has multiple relevant highs.
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