RBA Meeting: Will Hawkish Tone Surprise Markets?

Volkmar Baur at Commerzbank expects the Reserve Bank of Australia (RBA) to keep interest rates unchanged, in line with market pricing. However, he notes that there's scope for a slightly hawkish tone due to high petroleum prices and reduced hike expectations.

The RBA meeting is expected to be a non-event, with 99% probability of no change in the cash target rate. Nevertheless, Baur believes it will be interesting to see how central bankers interpret diverging trends in labor market and inflation.

Inflation has surprised on the downside twice since the last meeting, while the labor market has proven robust once again. Additionally, the housing market is expected to be a topic of discussion.