Select Language

RBA: On track for an extended pause - Standard Chartered

Breaking news

RBA: On track for an extended pause - Standard Chartered

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.04 18:00
RBA: On track for an extended pause - Standard Chartered

update 2024.11.04 18:00

We expect the RBA to keep the cash rate unchanged at 4.35% at the 5 November meeting. The benign Q3 CPI report removes any residual risk of further tightening in November. AUD weakness may reverse on FX positioning unwinds in the event of a Harris victory, Standard Chartered's FX and Macro Strategist Nicholas Chia notes.

Comfortably on hold

"We expect the Reserve Bank of Australia (RBA) to maintain the cash rate at 4.35% on 5 November. The relatively benign Q3 CPI report strengthens our view for the RBA to remain on hold this year, with little impetus to change the policy rate in either direction. CPI inflation eased to 0.2% q/q in Q3 (Q2: +1%) amid an extension to the government's energy rebates and lower oil prices (-7.4% q/q); on a y/y basis, inflation was at 2.8% (Q2: 3.8%). Trimmed mean CPI, the RBA's preferred measure of underlying inflation, eased to 0.8% q/q in Q3 (Q2: +0.9%) and 3.5% y/y - an 11-quarter low (Q2: 4.0%)."

"The RBA is likely to judge that CPI disinflation remains on track, which removes any residual risk of a rate hike this year. However, the central bank is unlikely to ease policy soon, given that trimmed mean inflation (+3.5%) is still above its 2-3% target. The RBA may also be wary of any signs of an enduring rebound in inflation, such as the bounce in services inflation to 4.6% y/y in Q3 (Q2: 4.5%) partly due to base effects."

"In terms of risks, the RBA may opt for a hawkish hold and bring back guidance that policy is "not sufficiently restrictive", citing above-target underlying inflation for three straight years and persistent services inflation, which puts rate hikes back on the table. On the flip side, the RBA may drop the reference to 'upside risks to inflation' and 'the Board is not ruling anything in or out', suggesting that underlying inflation, while above-target, is trending in the right direction. It may also emphasise the recent weakness in household spending despite budgetary tax cuts. Both of these are not our baseline, but would be interpreted by markets as dovish, and therefore AUD-negative."

 


Date

Created

 : 2024.11.04

Update

Last updated

 : 2024.11.04

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Pound Sterling trades flattish ahead of US presidential election, Fed-BoE decisions

The Pound Sterling (GBP) trades in a very tight range around 1.2950 against the US Dollar (USD) in Tuesday's London session.
New
update2024.11.05 16:43

EUR/JPY strengthens ahead of ECB's Lagarde speech

The EUR/JPY cross attracts some buyers to near 165.75 during the early European session on Tuesday.
New
update2024.11.05 16:18

Forex Today: Markets remain on edge on US election day

Here is what you need to know on Tuesday, November 5: Financial markets remain on edge as the US presidential election takes center stage, with latest polls pointing to a tight race.
New
update2024.11.05 16:02

EUR/USD Price Forecast: The bearish outlook remains intact below 1.0900

The EUR/USD pair remains firmer near 1.0880 during the early European session on Tuesday.
New
update2024.11.05 15:13

USD/CHF remains below 0.8650, market caution emerges ahead of US presidential election

USD/CHF holds ground after registering losses in the previous session, trading around 0.8640 during the Asian hours on Tuesday.
New
update2024.11.05 14:52

FX option expiries for Nov 5 NY cut

FX option expiries for Nov 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
New
update2024.11.05 14:24

Silver Price Forecast: XAG/USD remains steady around $32.50 ahead of US election

Silver price (XAG/USD) maintains its position around 32.50 during Asian trading hours on Tuesday as traders adopt caution ahead of the US presidential election.
New
update2024.11.05 13:57

AUD/NZD sticks to modest gains near one-week top, around 1.1030 area post-RBA

The AUD/NZD cross reverses an Asian session dip to the 1.0990 region and rallies to a one-week top on Tuesday in reaction to the upbeat Chinese data.
New
update2024.11.05 13:44

India Gold price today: Gold falls, according to FXStreet data

Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
New
update2024.11.05 13:36

RBA's Bullock: Believe rates need to stay restrictive for time being

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, following the announcement of the November monetary policy decision on Tuesday.
New
update2024.11.05 13:35

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel