19 May 2015
RBA minutes: Provides an explicit easing bias - ANZ
FXStreet (Bali) - Felicity Emmett, Co-Head of Australian Economics at ANZ, notes that today's RBA minutes provides an explicit easing bias once again, suggesting that the Board has scope to adjust rates lower if needed.
Key Quotes
"Today’s RBA minutes from the May board meeting provided little new information on the economy. The minutes did, however, provide an explicit easing bias – something that was absent from the post-meeting statement, although in our view implicit in the Bank’s ongoing forecast for below-trend growth and rising unemployment."
"The minutes reiterated the comment about “recent encouraging trends in household demand” and also noted that “further depreciation of the exchange rate seemed to be both likely and necessary, particularly given the significant declines in key commodity prices”."
"In combination with Deputy Governor, Phil Lowe’s speech yesterday, they suggest that while the Board is reluctant to cut further, it has scope to adjust rates if growth disappoints."
"The minutes note that the Board considered waiting until the June meeting to cut rates, with June giving the advantage of having the additional information included in the Commonwealth Budget. This seems surprising when the Bank rarely moves in June."
"Over the past twenty five years, the Bank has only adjusted rates twice in June and on both occasions they followed moves in May. Given the Budget was not materially different to expectations in terms of the profile for fiscal consolidation we expect that any impact on the Bank’s forecasts would be marginal."
Key Quotes
"Today’s RBA minutes from the May board meeting provided little new information on the economy. The minutes did, however, provide an explicit easing bias – something that was absent from the post-meeting statement, although in our view implicit in the Bank’s ongoing forecast for below-trend growth and rising unemployment."
"The minutes reiterated the comment about “recent encouraging trends in household demand” and also noted that “further depreciation of the exchange rate seemed to be both likely and necessary, particularly given the significant declines in key commodity prices”."
"In combination with Deputy Governor, Phil Lowe’s speech yesterday, they suggest that while the Board is reluctant to cut further, it has scope to adjust rates if growth disappoints."
"The minutes note that the Board considered waiting until the June meeting to cut rates, with June giving the advantage of having the additional information included in the Commonwealth Budget. This seems surprising when the Bank rarely moves in June."
"Over the past twenty five years, the Bank has only adjusted rates twice in June and on both occasions they followed moves in May. Given the Budget was not materially different to expectations in terms of the profile for fiscal consolidation we expect that any impact on the Bank’s forecasts would be marginal."