Lates News

TD Securities expects the Reserve Bank of Australia to maintain the interest rate at 4.35%. This baseline scenario is largely in line with market expectations and the overnight index swap pricing, which indicates that the probability of a rate hike today is close to zero. This suggests that the interest rate decision itself poses very limited unexpected risks for the Australian dollar or the interest rate market. More meaningful signals may come from the Monetary Policy Statement released alongside the rate decision. TD Securities anticipates that, despite the trimmed mean CPI data being weaker than expected, the Reserve Bank of Australia will resist making significant downward adjustments to its inflation forecasts, as high oil prices continue to pose persistent upward risks to the inflation outlook. A combination of confirming a hold and a cautious rather than dovish forecast revision suggests that the market's reaction will be relatively mild. Any surprises are more likely to stem from the tone of the forecasting language rather than the rate decision itself.