November has previously been a popular month for the Reserve Bank of Australia to move the official cash rate. In the first six years of RBA Governor Glenn Steven’s tenure, every November proved to be a moving month (2006-2011). In 2012, the RBA was certainly “in play” with moves occurring in both October and December, while the Bank was also “in play” in November last year. This year however will be the first instance since 2006 where there is no chance of a November move, with the RBA almost certain to leave the official cash rate on hold at 2.50% and to once again note that “the most prudent course was likely to be a period of stability in interest rates”.
This Friday, the RBA releases its quarterly Statement on Monetary Policy. More favourable assumptions on the currency and oil prices could allow the RBA to revise up the GDP forecast for mid-2015 slightly, while global dis-inflation will help keep the CPI well contained. In this environment, monetary policy can remain accommodative well into 2015. The statement is not expected to elaborate on the discussion of possible “macro-prudential” policies introduced in the RBA’s September Financial Stability Review.
This Melbourne Cup Day RBA Board meeting should keep the status quo for monetary policy and a neutral tone for the statement so you can concentrate on picking a winner in the horse race that stops a nation. For what it’s worth, I like the Japanese horse Admire Rakti, but this horse will be the favourite at 5:1 and no favourite has won the Melbourne Cup since Makybe Diva in 2005. So my other tips (and I say this loosely) are Protectionist (the German champion) and Lucia Valentina (beaten favourite behind Admire Rakti in this year’s Caulfield Cup). As is always the case, the usual disclaimers apply – "this does not constitute investment advice and you should consider obtaining financial, tax or accounting advice on whether this information is suitable for your circumstances.... etc etc".
Good luck with your study of the racing guide and punting on the most difficult of horse races to pick a winner. At least be consoled by the fact that your study will not be disturbed by any surprises out of the Reserve Bank, which announces its decision 30 minutes before the big event!