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According to Bill Evans, Analyst at Westpac, “the minutes confirm the RBA’s easing bias but suggest they will hold rates in December in order to monitor incoming data. We continue to expect a cut in the cash rate to 0.50% in February.”

Key Quotes:

“The minutes of the November monetary policy meeting of the Reserve Bank Board give us no significant reason to change our view that the next rate cut will occur in February.

While some forecasters have been promoting the idea of a move in December, these minutes provide the flavor of a Board that is in no hurry to make the next cut. The minutes conclude that “the Board would continue to monitor developments”.

The case for a December rate cut is heavily downplayed in these minutes, although, as discussed, the meeting occurred before the disappointing wages and employment prints from last week.

We certainly do not believe that those prints will be sufficient to move the RBA away from its current “monitoring” approach and so confirm our forecast that the next cut will occur in February 2020.

The discussion around the impact of low rates on confidence is clearly very significant and gives some support to our view that 0.5% will be the effective lower bound of the cash rate in this cycle.”