With a rate hike completely off the table, the primary focus was on housing, the labour market and the inflation outlook in its accompanying monetary policy statement.
But with the key GDP data due tomorrow it was even less likely the RBA would make any significant adjustment to previous comments.
The recent economic data, with most aggregators settling within the RBA current forecasts, appear to have calmed concerns at the Bank, well at least for now. I think the RBA is prepared to look through any soft patches in Q 1 data due in part to the transitory influences of Cyclone Debbie.
The Australian Dollar is trading mixed with little shift in language. However, this may be more a function of today bad Q1 trade data. However, there is nothing in the statement corroborating the markets slightly dovish lean as there is around 6bp of cuts price in through to Dec (most dovish pricing this year) so the Aussie could find support
Our base view remains that the RBA is likely to wait for further improvements in the domestic economy with the CPI print at the end of next month to be the chief agitator for a change in rhetoric. Even then, our view remains steady as RBA is likely to remain on hold through the remainder of 2017
Overall the Australian dollar continues to recover well post Friday weaker NFP print, despite iron ore prices slumping.
