Australia: RBA to keep cash rate on hold – TD Securities

TD Securities analysts point out that tomorrow we have the next RBA Aug cash rate decision and they expect the RBA to keep the cash rate on hold at 1%, following cuts at the 2 prior meetings.

Key Quotes

“The Bank is unlikely to deviate from its script, waiting to assess the impact of the tax cuts and two cash rate cuts.”

“We expect another stonking trade surplus in June thanks to not only a 13% rise in iron ore prices but a 6% increase in iron ore volumes. As for imports, the 10% drop in oil prices in Jun should make a meaningful dent on the import bill.”

“We forecast exports +5% m/m but for imports to drop 3%. This should drive the trade surplus to a record of A$8.25b and make it increasingly likely to achieve a surplus on the capital account, the first time in 50yrs.”