Two scheduled appearances by Reserve Bank Governor Michele Bullock and the Deputy Governor this week are set to give the market a preview of the next chapter in the cash rate saga.
The cash rate target sits at 3.60 per cent following the August reduction, with the post-meeting statement describing inflation as having returned sustainably to the 2-3 per cent band while flagging that the board remains attentive to upside risks in services prices and unit labour costs.
Governor Bullock is set to front an Anika Foundation address in Sydney midweek, followed by Deputy Governor Andrew Hauser at a Bloomberg event in Melbourne later in the week.
RBA Governors of the past have previously used speeches like the one set for the Anika Foundation as a place to lay out the framework for the next move ahead of the next meeting of the Board.
Governor Bullock has said that the Board takes into account a swath of data before making rate decisions. And the data this time around is big.
The ABS monthly Consumer Price Index indicator printed at 2.8 per cent year on year for July, the trimmed mean reading sitting a touch above headline and continuing to drift toward the midpoint of the band. The unemployment rate has ticked to 4.3 per cent and hours worked declined for a second consecutive month on the most recent print.
And then there’s the ongoing fallout from the Federal Budget as it starts to take its toll on auction clearance rates around the country.
As the papers shuffle across the desks of RBA’s corporate communications team ahead of speech-time, the big four banks are already moving. Special 12-month offers advertised below 4.40 per cent are now in market, down from the 5.10 per cent peak available a year ago.
We’ll have to wait and see where the wind blows for Bullock as she takes the podium this week. Stay tuned for updates.
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