RBA: Less upbeat tone likely tomorrow – TDS

According to Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, the tone of the RBA's Feb statement is likely to be less upbeat than the Dec statement, but the statement is likely to disappoint the doves.

Key Quotes

“We anticipate the Bank is likely to reaffirm growth to track above trend (2.75%) and for inflation to return to target, but for progress to be 'gradual'.”

“The RBA commentary is likely to flag downgrades to GDP forecasts but for CPI forecasts to remain unchanged. Risk is for inflation to take longer to return to target.”

“If the Bank removes 'gradual' from the statement, this would allude to deeper cuts to GDP forecasts and the inflation profile.”