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RBA will be comfortable holding rates steady next week – Wells Fargo

Next week, the Reserve Bank of Australia (RBA) will announce its monetary policy decision. Wells Fargo analysts say that given clear signs of an economic slowdown and signs of easing price pressures, they believe RBA policymakers will feel comfortable keeping the policy rate at 4.10%.

Notable Statements:

Although RBA policymakers seemed concerned that services inflation could remain elevated, slowing wage growth and details of July’s CPI figures offer some encouragement that underlying price pressures could be easing. going in the right direction.

Meanwhile, the signs of a slowdown in activity are more pronounced. Real retail sales for the second quarter fell 0.5% q/q, marking the third consecutive quarterly decline. Employment fell by 14,600 people in July, and August PMIs remained in contraction territory, pointing to subdued activity in both the manufacturing and services sectors.

The weakening of the Chinese economy could also weigh on Australian growth, given the extensive trade links between the two countries.

Source: Fx Street

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