Very easy RBA decision to pick today (for most). As I explained last week, the RBA made it clear it was not cutting rates until it had seen the first quarter inflation data, which it gets later in the month. Obviously another awkward moment for anyone who expected that the RBA would cut rates today...The RBA's statement was also predictably dovish (there is not much to be hawkish about at present), although it did argue that domestic demand in Australia had run at its fastest pace in four years. The most important point, however, is that the RBA assesses that output growth may be slightly weaker than it had previously assumed, and if it gets a benign inflation print in a few weeks time it will have scope to cut rates one notch more. That's a big "if". On the housing market, the RBA believes that it is starting to stabilise, as I have argued here on too many occasions to count. Specifically:
"Housing prices have shown some signs of stabilising recently, after having declined for most of 2011, but generally the housing market remains soft."
