RBA interest rate decision: expected to hold, but ... - Westpac

Analysts at Westpac noted the key events ahead today in Asia with the RBA interest rate decision coming up.

Key Quotes:

"The Q1 GDP report showed strength in net exports, but an absence of growth in domestic demand, with investment offsetting consumption. On inflation, the GDP report affirmed Q1 CPI’s message, but provided no additional cause for concern. Consequently the RBA is set to remain on hold until Aug when a follow-up cut should be delivered after the Q2 CPI.

China reserves: Global markets calmer mood continues to limit the need for intervention from authorities. A modest reduction in the stock of reserves is likely in May following two small increases in Mar/Apr. RBI: Activity data has been constructive, but numerous points of uncertainty linger: global demand on the one hand; domestic wages and inflation on the other.

RBI: Activity data has been constructive, but numerous points of uncertainty linger: global demand on the one hand; domestic wages and inflation on the other.

AUD/USD 1 day: The 0.7400 area beckons as bullish US dollar bets are abandoned in the wake ofFriday’s weak US labour data. 

AUD/USD 1-3 month: Multi-month we expect the US dollar to eventually find its feet and help drag AUD/USD lower. In addition, further RBA easing will be a negative. We target sub-0.72."