RBA: No surprises at Governor Stevens’s last meeting – RBC CM

Elsa Lignos, Senior Currency Strategist at RBC Capital Markets, notes that there were no surprises at Governor Stevens’s last meeting, with the cash rate unchanged at 1.50% and limited changes to the short statement.

Key Quotes 

“Our AU economists note that it covered familiar territory, with an easing bias difficult to detect (without knowledge of its macro forecasts). The RBA continues to note the moderation in house prices over the last year and the key concluding paragraph hints at reasonable satisfaction with the current policy settings.

Also out were Q2 balance of payments data, showing a downward revision to the current account deficit (as a result of revisions to primary income credits).

Q2 GDP is out tonight. We look for GDP to have grown 0.4%q/q and 3.2%y/y in Q2. The deceleration from Q1’s quarterly outturn reflects our expectation of a smaller, but still positive, contribution from net exports, modest household spending, and ongoing expansion in residential activity. Business investment will likely post another large fall and provide significant drag. Looking into 2017, growth will likely moderate further as cyclical sectors slow, revealing a slow-growing underbelly of activity.”