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Analysts at Societe Generale offer a sneak peek at what to expect from today’s Reserve Bank of Australia (RBA) interest rate decision due at 0330 GMT.

Key Quotes:

“Meeting is unlikely to reveal any substantial shifts in its assessment of the economy or the likely course of monetary policy. And interest rates are practically certain to be on hold.  

By the time of the meeting some important further partial data will have been released which could have shifted expectations.  

Assessment of the international environment is also unlikely to have changed much

At the margin, however, we would expect any shifts in language to be towards a slightly less downbeat assessment.  

Economic indicators for Australia, meanwhile, have been mixed. On the upside,  the labour market, consumer sentiment and sliding house prices. On that topic, while prices continue to decline, there are tentative signs that the rate of descent is moderating, and auction clearance rates have clearly recovered. Nevertheless, residential construction activity is bound to decline markedly over the coming several years.  

Private capital expenditure in 4Q18 also surprised on the upside, although the other “partial” for investment in GDP, construction work, was very weak.  

On the downside, headline wage cost index was slightly weaker than expected, retail sales were very weak in December and housing-related credit continues to slow sharply.”