The “big four” in Australia are all anticipating no change to the cash rate, so that sort of lays down expectations ahead of the meeting. This is one where the RBA could be ‘skipping’ a rate hike as they pause and reassess the inflation and economic outlook.
But if they are going to have the propensity to surprise, it will be leaning towards another 25 bps rate hike.
As things stand, OIS futures are showing 65% odds of no change in the cash rate with the remaining 35% favouring a 25 bps move. That’s not really overwhelming confidence that traders are firm on whichever decision.
As such, therein lies the risks for the aussie as a pause could weigh slightly on the currency while a surprise rate hike is likely to give it a modest boost; all else being equal.
You can check out the host of previews posted by Eamonn here.