Do not rule out another cut from the RBA - ANZ

Analysts at ANZ noted that while the RBA’s statement fell short of providing explicit forward guidance, we interpret the larger number of risks to the outlook and the RBA’s forecast that average underlying inflation will be stuck at the bottom of the 2-3% target band by the end of 2018 as a strong easing bias.

Key Quotes:

"Our base case is that rates remain on hold at 1.5%, but we see a clear risk of further cuts given the RBA expects persistently low inflation."

"The AUD is also important given the RBA thinks it still poses a “significant source of uncertainty” around the outlook."

"With the cash rate now close to the 1% floor, the RBA is likely to be looking more closely at unconventional options if downside risks to the outlook materialise."