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David Plank, head of Australian economics at ANZ, explains that as expected by almost all commentators the RBA Board left the cash rate at 1% following its September meeting.

Key Quotes

“We think the RBA will ease again before the end of the year, but the data since the last meeting clearly did not reach the threshold of an “accumulation of additional evidence” that the Bank has set as being needed to trigger another rate cut.”

“This leaves us focused on changes to the statement to garner how the Bank’s thinking has evolved, particularly the final paragraph.”

“We must remember that even this trend outlook is predicated on another 50bp of rate cuts. Growth around trend is unlikely to be sufficient to push inflation back into the target range on a sustained basis. So it seems reasonable to assume that in the absence of an upward growth surprise the RBA thinks more than 50bp of easing (or its equivalent) will eventually be required.”