– Despite recent weaker data, the RBA is likely to remain on the bench this week and keep they cash rate steady at 3%.
– The RBA also releases the latest quarterly Statement on Monetary Policy (SMP) next Friday.
– In our view, inflation is sufficiently tame for the RBA to implement another rate cut if demand conditions weaken. We expect rates to stay on hold in May and beyond. Market sees a 51% chance of a May RBA rate cut.
– Key domestic data due includes: April jobs, March retail trade (including QI volumes), and March international trade.
– Bank of England (BoE) meets on Thursday but no policy change is likely, despite the ECB’s recent rate cut to 0.5%.
– Stronger April non-farm payrolls released last Friday will set a positive trading tone for markets early next week.
Click here to read the full report: Market Research
Commonwealth Bank