Global Macro Service > Data Insights > Asia Pacific

No RBA Cup Day surprise - cash rate stays at 1.5%

As widely expected, the Board of the Reserve Bank of Australia leftthe cash rate unchanged at 1.5%. The Board noted that global growth momentum remains solid, and that forward-looking indicators for business investment are positive, but continues to voice concerns regarding the pace of growth in housing debt and the outlook for household consumption.

We expect the cash rate to stay on hold until FY2020. Although employment has grown robustly this year slack remains in the labour market, and the Board will need to see clear evidence of this spare capacity being absorbed, which will generate wage and price inflation, before it begins monetary tightening.

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