TD Securities expects the RBA to keep the cash rate at 4.35%, a base case in
line with market expectations and OIS pricing that shows near-zero odds of a
hike, implying limited surprise risk to the AUD or rate markets from the
decision itself. The Monetary Policy Statement will be the more market-relevant
signal. TD Securities expects the RBA to resist materially downgrading inflation
forecasts despite weaker-than-expected trimmed-mean CPI, citing elevated oil
prices as a persistent upside risk. A confirmed hold plus cautious (not dovish)
forecast revisions should produce a muted market reaction; any surprise is
likelier to stem from the wording of the forecasts than from the rate decision.
