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According to analysts at Westpac, Tuesday’s RBA meeting is of key importance after the Australia’s soft Q1 CPI reading dramatically increased the likelihood of near term action from the RBA.

Key Quotes

“Market pricing for a cut in May skyrocketed to near 70% immediately following the print, thought has settled on just shy of 50% priced for the past week. Current pricing suggests a 49% likelihood of a move.”

“We continue to believe the RBA will move to an easing bias at their 7 May meeting which will be clarified in the 10 May Statement on Monetary Policy. This will set the stance for our forecast of 25bps cash rate cuts in August and November.”