The Reserve Bank of Australia left the official cash rate unchanged at 1.75% last week, as widely expected. The lack of forward guidance however was surprising and markets interpreted this as the RBA moving to a more neutral stance, reducing the pricing of a rate cut at the next (July 7th) RBA meeting to just above 15% probability. We still expect one more rate cut in this cycle, at the August meeting, after the June quarter CPI data, but it will be data-dependant.
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