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Reserve Bank of Australia (RBA) Governor Phillip Lowe gave his opening statement to the House of Representatives Standing Committee on Economics in Canberra on the RBA’s outlook on the Aussie economy and interest rates.

Key highlights

Expects the next RBA rate move to be up.

It is likely that inflation and unemployment will continue to gradually improve over several years.

Global outlook continues to introduce new stress points, external risks.

Australia is making progress towards full employment, inflation is returning to the midpoint of the RBA’s target range.

An escalation in global trade war fears is a major uncertainty at this time.

The RBA’s view is that they will remain on hold for some time yet.

It will be “some time” before Australia actually reaches full employment.

The RBA is prepared to maintain its current policy stance.

Emerging market shocks are also a potential weak point.

Housing markets in Sydney, Melbourne have clearly slowed, prices are beginning to fall.

Wages growth is expected to remain ‘gradual’.

There is not a strong case for a near-term adjustment in interest rates.

The Australian economy looks to have experienced stronger growth in 2018’s H1, though drought in Eastern Australia could be a drag.