RBA to keep the cash rate on hold – TD Securities

Analysts at TD Securities are expecting the RBA to keep the cash rate on hold at 1%.

Key Quotes

“OIS is virtually priced for this and polls are unanimous. We are paid Sep'19 OIS.”

“RBA forecasts assume 2 further cuts, which we expect in Nov'19 and May'20. The risk to our forecast is for the Bank to pull the trigger earlier, not later.”

“The Bank is likely to reiterate it remains open to cutting further 'if needed'. 'Additional evidence' such as poor Q2 GDP after this last week's poor Q2 construction and building approvals data could trigger an Oct cut.”

“Today's weaker inventories print implies downside risk to TD's 0.6% q/q and the mkt 0.5% Q2 GDP forecast. In contrast, property prices are resuming their march higher. We will look for any changes in language around these contrasting risks.”