It was a make-or-break call for Paul Bloxham at HSBC. His first, and as ballsy as they come--reiterated again only minutes before the announcement. The important thing is he got it right. Damn right. Pretty much everybody else, including the former Shadow Governor, got it wrong. Here is some plain english from the young gun:
"Recall that, the broad shift to an expectation of rate rises came two weeks ago when the Governor started to lay the groundwork for a potential tightening. This was also backed up by the previous meetings minutes, which suggested that higher interest rates would be needed 'at some point'.
Fast forward to today, and we see that the statement by the Governor once again suggests that 'higher interest rates will be required, at some point'.
Some are interpreting this (including the short term money markets) as an indication of a shift in the Reserve Bank's thinking toward a more dovish view. Others are suggesting that because it did not mention a range of indicators, including the exchange rate or the labour market, that the RBA is not concerned with those developments....
We are firmly of the view that the statement provides little more information than was communicated two weeks ago. At that time the Bank was just setting the scene for rates rises. Simple as that. This statement just repeats that mantra."
