RBA may not turn dovish yet but acknowledge balance of risks have changed

By Sophia Rodrigues

Published On 05 Feb 2019 , 07:02 AM

One of the most awaited RBA cash rate statements is due today and hardly likely to be exciting. Key themes would be improved outlook for business investment -- non-mining and mining, continued positive outlook for terms of trade, and positive outlook for labor market. These would offset concerns about falling housing prices for now (also because households are getting boost from lower fuel prices). Stable for longer would be RBA's key message but that may not be evident today. I will look for "probability" in Lowe's speech and assessment of risks in the SOMP. Bottomline: The available information doesn't leave scope for RBA to turn dovish now but that doesn't mean they don't recognize the balance of risks have changed.

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