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David Plank, Head of Australian Economics at ANZ, points out that latest release of the RBA Minutes showed that the Bank has an explicit easing bias, but not one that suggests a near-term call to action.

Key Quotes

“Certainly we don’t think the domestic data since the August meeting meets the Board’s threshold of an “accumulation of additional evidence”. The global news flow has been more negative, but not enough on its own to meet the RBA’s threshold in our view. Together this suggests a September rate cut is unlikely.”

“We think October is in play, however, with some critical data due between the September and October board meetings such as Q2 GDP, business and consumer sentiment readings and labour market data.”

“The Minutes note that members had considered the “experience of other advanced economies with unconventional monetary policy.” To us the key things from this discussion are the following (and consistent with the Governor’s parliamentary testimony after the August Board meeting):

Members noted that a package of measures tended to be more effective than measures implemented in isolation. Finally, it was important for the central bank to communicate clearly and consistently about these measures.”