The RBA held the official cash rate steady at its board meeting on the first Tuesday in September, as it had for every meeting since the cash rate was reduced in August 2016.
The usual references were there. A future rate change is more likely to be an increase rather than a decrease. There is no strong case for a change in the near future. Gradual progress is being made towards a lower unemployment rate. Wages growth is expected to rise gradually. The next move in the cash rate is more likely to be an increase than a decrease. As the chief economist at Westpac put it, the minutes “for September show little significant change…”
Reactions from various financial markets was varied. Locally, bond yields ignored weak offshore leads and finished the day higher. 3-year and 10-year ACGB yields each gained 4bps to finish at 2.10% and 2.68% respectively. In cash futures markets, prices moved in a way which suggests traders dialled back the chance of a rate rise in any given month and contracts imply little chance of a rate rise before August 2019. The Aussie dollar finished the day up a little at 72.20 US cents.