From ICAP today:
"For mine this is a fairly critical meeting though. Should the RBA Board fail to hike rates today, following two back to back increases of about 0.9% on the cores, then I think we should take that as a fairly strong signal that the inflation target has been massaged. We know that global growth concerns or global debt concerns or other concerns are not going away. These fears can be used at every meeting. They will be a constant feature, they were a constant feature through strong growth outcomes last year. The word of the moment has to be ‘concerns’. The key question for the market is whether never-ending ‘concerns’ now mean the Board will tolerate higher inflation. I think we’ll find out today. Such a move would be more consistent with other Anglo central banks who have clearly either dropped inflation targets (eg the BoE) or are at least willing to accept a higher and as yet unannounced target over the forecast horizon ,in order to address other issues - i.e. strong currency in the case of the RBNZ and BoC."
