RBA Minutes from the July 4th meeting stated that the Board considered holding rates steady or hiking by 25bps and there was a strong case for both but Board judged arguments for holding steady were stronger

Says:

• Board agreed some further tightening may be required and would reconsider at the August meeting.


• Current stance of monetary policy was clearly restrictive and would become more so.


• Board discussed risks economy and consumption could slow more.


• Board noted a squeeze on household finances and the risk unemployment could rise more than needed, while the inverted yield curve pointed to tighter conditions and slowing growth.


• Risks with waiting too long for inflation to return to the target.


• Labour market is very tight and weak productivity is adding to labour costs.


• Inflation is proving sticky in other countries.


• While domestic inflation has eased, service inflation is still high along with rents, energy and food.


• Economy had slowed considerably and Q2 GDP growth is seen around 0.2% Q/Q,


• Consumer spending is seen weak in Q2 and rebound in housing market will support consumption.

Reaction details (02:56)

• AUD/USD immediately moved lower by 6 pips to 0.6822 from 0.6828 but then proceeded to move lower to trade around 0.6812 in the 15 minutes after the releases. 

18 Jul 2023 - 02:30- Fixed IncomeData- Source: Newswires