RBA stuck broadly to the themes laid out in the May policy meeting - Rabobank

Piotr Matys, EM FX Strategist at Rabobank, explains that in Australia, as expected the RBA announced steady interest rates today and stuck broadly to the themes laid out in the May policy meeting. 

Key Quotes

“The broad pick-up in the global economy was acknowledged but the high level of debt in China was again citied as a risk. Weaker iron ore and coal prices and sluggish wage inflation were also identified as headwinds.  The earlier release of Australian Q1 net export data confirmed that trade would detract 0.7% ppts from growth in the March quarter, prompting some economists to lower their expectations for Q1 GDP growth due for release tomorrow.  Although the RBA is constrained by high levels of household debt, the market is currently less certain that the RBA’s interest rate cutting cycle is over than it was at the start of the year.”