RBA Policy Announcement Expected to Show Caution Amid Easing Inflation

The Reserve Bank of Australia (RBA) is set to make its latest policy announcement on Tuesday, with investors expecting it to keep the cash rate at 4.35%.

In a recent note, Danske Bank said that after three rate hikes during the spring, 'the RBA is unlikely to tighten its policy rate much further in the coming meetings either.'

The bank's expectations are based on inflation data from the second quarter, which saw headline CPI ease to 3.9% year-on-year, well below the RBA's 4.8% forecast.

ING also weighed in, stating that 'price pressures are easing faster than the RBA envisaged,' and that this strengthens the case for an extended hold through year-end.