RBA Statement on Monetary Policy previewed – ANZ

In the view of the Australia and New Zealand Banking Group analysts, “the coming week is full of important data releases and events, not least the November Statement on Monetary Policy (SoMP). “

Key Quotes:

“We think the Reserve Bank’s near-term GDP forecasts will be revised down a touch, reflecting the June quarter GDP result and what appears to be softer than expected consumer spending in the third quarter.

On that score, the retail sales data due on Monday will be of considerable interest. August retail sales pointed to a positive impact from the tax and interest rate cuts, and we think there will be more evidence of this in September, albeit lower than what we expected earlier in the year. This would be an indication of the “gentle turning point in economic growth” that the RBA Governor referred to earlier this week.

While at the margin this weakens the case for further rate cuts, we struggle to see how unemployment can fall as far as the RBA wants without further easing. Not least because inaction would likely see the AUD push higher.”