something interesting

<  BACK TO Market Analysis

RBA: No substantive changes

The minutes to the RBA’s June monetary policy meeting mainly reiterated the key points from the Governor’s decision statement and the additional ‘message’ from previous minutes – that the Bank’s main focus was on developments in labour and housing markets, according to Matthew Hassan, Research Analyst at Westpac.

Key Quotes

“That said, there were some notable details: an intriguing new paragraph on financial stability in the ‘Considerations for Monetary Policy’ section; a slightly more bullish/hawkish discussion of international conditions; and several useful snippets from the detailed discussion including those gleaned from the Bank’s liaison programme.”

“As per the Governor’s decision statement, the slower growth picture for the March quarter was acknowledged but attributed to “quarter to quarter variation” with the Bank’s positive medium term outlook for growth to rise to a little above 3% reaffirmed.”

“The labour market commentary in the minutes was perhaps a little more positive than in the Governor’s statement which explicitly described indicators as “mixed”. The minutes do not use this particular term although the rest of the discussion is the same. Note that the RBA meeting took place well before the surprisingly strong May labour force report released last Thursday.”

“The more constructive view around business investment that appeared in the decision statement was largely repeated, the detailed discussion downplaying the disappointing forward view from the Capex survey, citing its limited coverage and more positive tone from approvals, liaison feedback and business surveys.”

“Turning to the ‘notable details’, the new paragraph on financial stability added to the ‘considerations’ section notes this aspect of the RBA’s role sits within its wider medium term inflation targeting framework, the effect of monetary policy decisions within this framework and the role of prudential supervision. It stresses the importance of cooperation and coordination across agencies facilitated by the Council of Financial Regulators. While there are no ‘overt’ messages in the discussion, its inclusion is intriguing. Is it, for example, implying that a coordinated approach may also apply if the RBA were to consider additional rate cuts? Alternatively, is it simply restating the clear message the Bank has already given about the importance of financial stability concerns for policy and a broad endorsement of the current status quo?”

“The June meeting minutes sounded less wary on international conditions and more alert to a potential lift in inflation. Whereas previous minutes regularly noted risks to China around residential property markets and rising leverage in the Chinese economy, this line did not feature in June which ran with simpler observations including that the “recovery in residential construction had continued despite the Chinese authorities having again tightened policy measures aimed at reducing speculative activity”.” 

“Conclusion

Monetary policy clearly remains firmly on hold as the Board assesses developments in housing and labour markets. The strong May labour force report released the week after the Bank’s June meeting would have eased some of its concerns on this front, although weak wages growth is likely still a factor (indeed this is one aspect of current conditions that could have received more discussion in the minutes which simply noted the link to consumer incomes and spending). It may also be becoming more comfortable around housing market risks as well although the situation here is clearly still evolving.

Overall there appears to be little shifting the Bank away from its positive medium term view on growth. Westpac’s more downbeat forecast for 2018 – based on a more significant drag from housing construction and falling commodity prices – will take time to become apparent and, in our view, will not be sufficient to draw an RBA interest rate response, particularly given its concerns about potential financial stability risks. As such we remain comfortable with our view that rates will remain on hold for the remainder of 2017 and 2018.”

Source: fxstreet.com

The minutes to the RBA’s June monetary policy meeting mainly reiterated the key points from the Governor’s decision statement and the additional ‘message’ from previous minutes – that the Bank’s main focus was on developments in labour and housing markets, according to Matthew Hassan, Research Analyst at Westpac.

Key Quotes

“That said, there were some notable details: an intriguing new paragraph on financial stability in the ‘Considerations for Monetary Policy’ section; a slightly more bullish/hawkish discussion of international conditions; and several useful snippets from the detailed discussion including those gleaned from the Bank’s liaison programme.”

“As per the Governor’s decision statement, the slower growth picture for the March quarter was acknowledged but attributed to “quarter to quarter variation” with the Bank’s positive medium term outlook for growth to rise to a little above 3% reaffirmed.”

“The labour market commentary in the minutes was perhaps a little more positive than in the Governor’s statement which explicitly described indicators as “mixed”. The minutes do not use this particular term although the rest of the discussion is the same. Note that the RBA meeting took place well before the surprisingly strong May labour force report released last Thursday.”

“The more constructive view around business investment that appeared in the decision statement was largely repeated, the detailed discussion downplaying the disappointing forward view from the Capex survey, citing its limited coverage and more positive tone from approvals, liaison feedback and business surveys.”

“Turning to the ‘notable details’, the new paragraph on financial stability added to the ‘considerations’ section notes this aspect of the RBA’s role sits within its wider medium term inflation targeting framework, the effect of monetary policy decisions within this framework and the role of prudential supervision. It stresses the importance of cooperation and coordination across agencies facilitated by the Council of Financial Regulators. While there are no ‘overt’ messages in the discussion, its inclusion is intriguing. Is it, for example, implying that a coordinated approach may also apply if the RBA were to consider additional rate cuts? Alternatively, is it simply restating the clear message the Bank has already given about the importance of financial stability concerns for policy and a broad endorsement of the current status quo?”

“The June meeting minutes sounded less wary on international conditions and more alert to a potential lift in inflation. Whereas previous minutes regularly noted risks to China around residential property markets and rising leverage in the Chinese economy, this line did not feature in June which ran with simpler observations including that the “recovery in residential construction had continued despite the Chinese authorities having again tightened policy measures aimed at reducing speculative activity”.” 

“Conclusion

Monetary policy clearly remains firmly on hold as the Board assesses developments in housing and labour markets. The strong May labour force report released the week after the Bank’s June meeting would have eased some of its concerns on this front, although weak wages growth is likely still a factor (indeed this is one aspect of current conditions that could have received more discussion in the minutes which simply noted the link to consumer incomes and spending). It may also be becoming more comfortable around housing market risks as well although the situation here is clearly still evolving.

Overall there appears to be little shifting the Bank away from its positive medium term view on growth. Westpac’s more downbeat forecast for 2018 – based on a more significant drag from housing construction and falling commodity prices – will take time to become apparent and, in our view, will not be sufficient to draw an RBA interest rate response, particularly given its concerns about potential financial stability risks. As such we remain comfortable with our view that rates will remain on hold for the remainder of 2017 and 2018.”

Source: fxstreet.com

lastest Articles

Market Analysis
Forex Week Ahead – The UK election is upon us
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY Technical Analysis: Bears challenge 50-DMA, ascending trend-line confluence support
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD sidelined around 1.1100 ahead of key US data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Happy Friday for trade talks, GBP/USD holding onto Boris boost, all eyes on the NFP
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
OPEC+ said to discuss deeper oil cuts – RTRS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold holds steady near $1475, weaker USD lends some support
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Kiwi lifted by RBNZ amid cautious optimism; eyes on OPEC+ meet, trade
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Asia: PMIs back in expansion territory – TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD stays firm near 1.1100, looks to data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoC Preview: Major Banks expecting BoC to hold fire today
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US: Mixed manufacturing data – Deutsche Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Back in the red around $ 1460 amid USD comeback
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's tariffs weigh on USD before meeting Boris, AUD surges, EUR rising
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Australia: Dwelling approvals weaken – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK Industry: Brexit, weak global demand to hurt UK in 2020
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: China lifts mood, Boris and Merkel in trouble, critical data kicks off December
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - Market Awaits China Retaliation on Trade
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOJ’s Kuroda: Not thinking of further easing at present
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD looks for direction near 1.10 ahead of key data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Soggy Black Friday mood, GBP/USD retreats, EZ inflation awaited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
AUD/USD struggles near multi-week lows, just above mid-0.6700s
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Villeroy: Brexit uncertainty likely to last for at least some quarters in the future
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Sterling surges as poll backs Boris, dollar bulls thankful, Trump angers China
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
If Trump refuses to roll back tariffs, loss to American farmers could be permanent – Global Times
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD is offered near term – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Massive pre-holiday US data dump, Trump holding back deal, critical UK poll eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK: Disorderly Brexit comes off the table – ABN AMRO
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD faces dual resistance lines, downside is easier – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets doubt US-Sino progress, Powell sees glass filling, GBP/USD spooked by poll
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD could still re-test the vicinity of 1.1100 – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Cheering China's olive branch to Trump, Boris extends lead, EUR/USD faces test
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Risk sentiment buoyed by trade optimism, focus on German IFO
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Markets remain fixated with the US-China Trade War and Brexit
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
JPY Futures: looks neutral/bullish near-term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Lagarde: We face a global environment that is marked by uncertainty
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: EUR/USD jumps to 1.1085 as German Preliminary Manufacturing PMI surprises positively with 43.8
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD clings to gains near 1.1080 ahead of ECB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold flirting with session lows, around $1470 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's trade deal in trouble, Boris bounces back, EUR/USD awaits ECB Minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price News & Forecast: XAU/USD $1,475 continues to cap upside
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC minutes: Key event ahead
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US Senate's HK bill weighs on sentiment, Corbyn crashing the pound, Fed minutes awaits
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY technical lines drawn as trade uncertainty persists – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
OPEC's share of Indian oil imports in October hits lowest since 2011 – Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar depressed amid trade skepticism, Bitcoin battered, Johnson-Corbyn debate eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
AUD/USD Technical Analysis: Upside is likely to remain capped near a support-turned-resistance
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
RBNZ likely to have two further cuts in May and August next year
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE expected to remain on hold for the time being
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY moves back closer to multi-month tops, around 109.25-30 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE to deliver a 25bps cut in January 2020 – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Tension toward Trump's trade comments, boost for Boris holds up, data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD clings to gains around 1.1020
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold recovers from 3-month lows, up little around $1465 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's trade pessimism pressures markets, Spain stuck again, UK GDP set to rise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - Trade war, UK, RBNZ, Banxico, Spain
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
RBA is not complacent about AUD remaining weak – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB Economic Bulletin: Moderate but positive growth in H2
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
FXSniper PAMM - The New GEM at FXPIG
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold ticks higher, lacks follow-through
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now risks a move to 1.1000 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Chinese tariff demands may break trade talks, USD marches forward, Fed speakers eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
OPEC: Raises mid-term outlook for non-OPEC Oil supply growth
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD upside loses momentum
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Asia: PMIs pull back – TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB: Focus on Lagarde’s speech
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE to leave the policy rate unchanged – Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets have reasons for a happy Monday, Boris Johnson remains in the lead, Lagarde eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Week Ahead – RBA and BOE Decisions in focus as UK election campaigns begin
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD trims gains and recedes to 1.1150 ahead of NFP
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
The Fed moves into a ‘wait-and-see’ mode
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar defeated ahead of Non-Farm Payrolls, Chinese data cheers markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD unchanged near 1.1170 post-EMU data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC and BoJ meetings should have supported USD/JPY – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar depressed after the Fed, trade talks accelerate, and another busy data day awaits
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC Preview: What 11 major banks are expecting from October
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD could still visit the 1.1180 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
Time to fall back
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Super Wednesday features the Fed, US GDP, and lots more as Brits brace for "jingle polls"
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Further upside in EUR/USD lost traction
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoC likely to leave the policy rate unchanged – Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's trade hope lifts markets, Boris brings elections to parliament, Bitcoin bruised by Chinese warning
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit, FOMC meeting amongst market movers this week – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold consolidates in a range, just above $1500 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Technical Analysis: recovery could extend to the 100-day SMA at 1.1128
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Week Ahead – Brexit, Fed, BoC, BoJ and Earnings
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit: EU to extend Brexit deadline without a date - Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold climbs to fresh two-week tops, above $1505 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC: Still no pre-commitment to more easing
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB meeting to be a relatively uneventful policy-wise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Brexit in the EU's hands, EUR/USD may struggle with Draghi one last time, Bitcoin battered
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB: Draghi’s last Governing Council meeting – Deutsche Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EU's Tusk: Will react to Brexit delay request in the coming days
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Steady trading – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Critical vote on Brexit, mixed messages on trade talks, Trudeau returned as Canadian PM
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD could test the 1.1200 region near term – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: GBP/USD breaks above 1.30 as DUP rejects customs union amendment to the Brexit deal
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Boris and sterling brace for more Brexit drama, some stability in trade, and Canada votes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit Optimism Rises Despite Parliament Obstacle
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY upside could be losing momentum – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now looks to a test of 1.1165 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613