RBA: Unlikely to shift from its neutral policy stance - TDS

Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, suggests that the RBA is unlikely to shift from its neutral policy stance-disappointing the doves-ahead of a likely decent fiscal boost even as global bond yields fell sharply in March and the RBNZ shifted to an easing bias.

Key Quotes

“The RBA can retain its upbeat labour market outlook given the unemployment rate dropped to 4.9% in Feb, reinforcing the current stance of monetary policy is doing its job.”

“There were three speeches from RBA officials in March that focused on housing and/or households - here, here & here. None of the speeches pointed to a shift towards cutting the cash rate.”

“While the RBA does acknowledge there are risks to consumption, the Bank can afford to assess developments over coming months - the next read on consumption is Q1 GDP on 5th June.”