Phillip Lowe's first RBA Board meeting will not see any rate change decision - the cash rate is almost definitely not moving from the current 1.50%. However, the main interest today is the policy wordings. A rate cut will exacerbate the house price problem with Sydney prices up by almost 50% in the last 4 years and that concerns the RBA. Along with this, record low wages, lower than the target inflation, rebounding of the commodity prices, a surging dollar are the biggest challenges that Dr Lowe and the RBA face as it charts out a strategy for Australia's monetary policy. Analysts are therefore keenly waiting to see the wordings of today's RBA board minutes. Some analysts are expecting that the cash rate will not be lowered for some time as it can act as a catalyst to further increase in house prices. Sydney housing assets are considered the fourth riskiest in the world after Vancouver, London and Stockholm and a number of market analysts have fears of a "bubble".
MARKET DATA
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Industrial Average Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) Iron Ore | As at 30-Sep 1.50 1.74 1.90 1.59 0.7630 0.6802 77.13 5.0893 5,435 2,168 18,308 3,004 50.19 1,316 56.68 | As at 23-Sep 1.50 1.74 1.99 1.62 0.7637 0.6819 77.13 5.0939 5,431 2,164 18,261 3,033 45.89 1,337 61.60 |
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