Interest rate cut arguments on show as Reserve Bank meeting notes set for release

While the Reserve Bank of Australia’s board voted unanimously to cut interest rates for the first time in four years, minutes from the meeting are expected to show deliberation leading to the decision was not so clear cut.

Hawkish commentary from RBA governor Michele Bullock and deputy Andrew Hauser since the February meeting has tempered investor expectations for more monetary easing.

Release of the board minutes on Tuesday will provide further insight into the central bank’s concerns for inflation, which stands in the way of more mortgage relief.

JP Morgan analysts Ben Jarman, Tom Kennedy and Jack Stinson said it was unlikely they would shed a great deal of new information on the policy discussion, given the bank’s detailed assumptions were released alongside the meeting in the Statement on Monetary Policy.

“Though any reference to members being briefed on the staff’s revised neutral rate estimates (evident in the SoMP) would have dovish implications for the terminal rate,” they said.

JP Morgan is still expecting the RBA to cut the cash rate again in May, after housing inflation continued to slow in January, data released after the meeting showed.

But given the board is more influenced by less volatile quarterly inflation data, due next on April 30, they did not expect the monthly figures to move the needle for the April 1 decision.

That meeting will be the first of the bank’s new monetary policy setting board, which formally took over from the existing board at the beginning of March.

Meanwhile, retail trade figures for the month of January will be revealed by the Australian Bureau of Statistics.

Westpac chief economist Luci Ellis expects sales to grow 0.4 per cent from December, with the bank’s card transaction data showing underlying momentum remaining firm.