Forex Flash: RBA steadies rates though future action eyed – NAB

The RBA today kept the cash rate steady at 3.00%, as expected by the market, having cut rates in December. “For us, they have retained an open mind on whether the non-mining sector will fill the void left as resources investment peaks and they also see lower inflation as giving them more scope to ease should that be necessary. We think there will be more easing in the months ahead.” writes the NAB Analyst Team.

Will it be at the March RBA Board meeting? There’s a large data suite on the local economy to be released between then and now, including key reports in the lead up to Q4 GDP that comes a day after the March Board meeting. For example, the December quarter capital expenditure survey (February 28) will update not only the outlook for this financial year but the first glimpse at 2013-14.

According to the team, “In the near term, there’s key numbers in the next two days, retail sales and employment, both market sensitive and soft we expect. We retain a cautious outlook and so the data trend will be to disappoint in the main. March is a “live” date but the timing of the next rate cut will be very data dependent. The NAB forecast calls for three more easing this year.”