RBA monetary policy announcement due at 0330GMT - preview (spoiler - on hold)
Reserve Bank of Australia Governor Lower will provide his statement alongside the decision at the same time.
There is no press conference. There never is, but folks do ask me from time to time.
Five hours after the RBA announcement is the government budget announcement. This is one of the major reasons the RBA is expected to leave policy unchanged today - they'll be wanting to factor in fiscal moves to projections before deciding on the next rate cut and other further easing measures (which do seem baked in, perhaps as early as the November meeting).
Via TD ... same message:
- expect the RBA to keep the cash rate/YCC target at 0.25% but for the Bank to highlight it continues to assess the merits of further monetary measures
- The reason the RBA is likely to keep policy unchanged at this meeting is to assess the Federal and state budgets over the coming month before potentially announcing further easing at the Nov meeting
Deutsche Bank
- expect no change in policy
- but watching for clues about whether a rate cut might yet be delivered by the end of the year
Standard Chartered
- expect the RBA to keep the policy cash rate unchanged at 0.25%
- Market expectations have swayed following Deputy Governor Debelle’s mid-September speech, before settling at our forecast of a November rate cut.
- We believe the RBA will cut the policy rate to 0.10% in November, while also adjusting the rate of its term funding facility and the target yield on three-year government bonds to 0.10%. It is also likely to reduce the interest rate paid on exchange settlement balances to between 2-5bps.
- Pausing in October will provide the RBA with crucial information on the labour market recovery under the revised JobKeeper and JobSeeker programmes, as well as the recovery in Victoria as the state is likely opened up (albeit slowly) in October.”
Earlier previews:
- RBA monetary policy meeting Tuesday 6 October 2020 - preview
- WPAC see a cut in November to cut the overnight cash rate to 0.1%; the three year target bond rate to 0.1%; the rate on the Term Funding Facility to 0.1%; and the rate the RBA pays on Exchange Settlement balances to 0.01%.
- NAB expects further RBA easing
- CBA is forecasting the RBA on hold at the next meeting
- ANZ do not expect the RBA to cut in October
- Update to predictions for what the RBA will do at its October policy meeting
- Citi sees the RBA in wait and see mode - and notes fat tail risks for AUD
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