The market is pricing in a one in five chance that the RBA will ease monetary policy at its Board meeting tomorrow. Given the flow of local economic data since the June Board meeting, we find it hard to argue with that degree of risk.
We expect the RBA to leave rates on hold at 2.75% and to retain their bias to ease monetary policy. Our formal forecast remains that there is another easing coming and we have pencilled that timing in as Q4.
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