In line with market consensus, analysts at Wells Fargo, expect the Reserve Bank of Australia to keep rates unchanged on Tuesday.
Key Quotes:
“The Reserve Bank of Australia (RBA) has held its Cash Rate at 1.50 percent for the past two years and is expected to keep holding its rate steady for the time being. Growth and inflation firmed modestly in Q2 with CPI inflation moving into the lower end of the RBA’s target range of two to three percent, while wage costs remain subdued. Given the overall gradual progress on inflation, minutes from the last monetary policy meeting noted that there was “no strong case for a near-term adjustment” in rates, while also indicating that the next rate move would more likely be an increase than a decrease.”
“We look for the RBA to keep rates unchanged next week.”
“Australian Q2 current account figures are also due on Tuesday, while Q2 GDP data are scheduled for release on Wednesday. The current account deficit is expected to widen slightly, to about 2.4 percent of GDP, while some moderation in Q2 GDP growth is expected, to a 2.8 percent year-over-year rate, down from 3.1 percent in Q1.”
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