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RBA statement coming up - Westpac

FXStreet (Guatemala) - Analysts at Westpac Banking noted that the focus will be on the revised forecasts in the RBA’s Statement on Monetary Policy that will be released at 11:30am Syd/8:30 Sing/HK.

Key Quotes:

"In the statement accompanying the policy decision on Tuesday, the RBA noted that inflation was expected to remain within the target band but may be a little lower than earlier expected. This suggests a revision to the inflation forecasts: we expect Dec 2015 and Jun 2016 to be lowered from 2.5% to 2.25%, with the midpoint rising back to 2.5% beyond that."

"The Bank had confirmed a somewhat more confident view around the growth outlook, citing business surveys, employment and economic conditions. We see the midpoint of the Dec 2016 growth forecast remaining at 3.0%, which would reinforce their decision not to move in the Nov meeting, and support our view that there will be no cut in Dec. It is however possible that the RBA revises its GDP forecast to centre around 2.75%, in line with new trend growth."

"This would not signal an immediate cut. A forecast of 2.5%, which we see as unlikely, would suggest a possible 25bp reduction of rates in Feb, given the next actual GDP print comes the day after the Dec meeting."

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