Commonwealth Bank of Australia expects the Reserve Bank of Australia to leave
the cash rate unchanged for the rest of the year while keeping hawkish language.
That hold-without-a-dovish-pivot limits the rate decision's near-term
directional signal for the AUD; more market-relevant will be forecast revisions.
CBA expects the RBA to raise its unemployment projection and lower both headline
and core inflation forecasts — a material downward revision to inflation would
be interpreted by markets as opening the door to later easing even if rhetoric
stays hawkish. Escalation in the Middle East could add cost pass-through in Q3,
an uncertainty that may force the RBA into a more hawkish stance than data alone
imply.
