RBA: Comfortably on the sidelines – TDS

Research Team at TDS notes that the RBA left the cash rate at 1.5% as expected by TD and unanimous consensus and dropped its February reference to having eased last year.

Key Quotes

“The statement was a near-repeat of February’s upbeat global view, while the RBA’s anticipation of stronger exports and consumption came to fruition in last week’s Dec qtr GDP report. The flat spots in the domestic economy are the prevalence of part-time employment and “subdued” labour costs.”

“To shift the RBA into a more hawkish stance we need to see a noticeable improvement in full-time hours worked. The February employment report is released March 16, and we did spot signs of life in the January report.”

“We see the next move being up for the cash rate due to rising financial stability risks, strong national income growth, and inflation swiftly returning to the target band.”