NAB Research discusses its expectation for tonight's RBA policy meeting.
"The RBA meets on Tuesday and the market is 79% priced for a rate cut with 74% of economists surveyed also expecting a rate cut, including NAB. Governor Lowe is also set to justify any decision in greater detail with a post-Board Dinner speech," NAB notes.
"Assuming a rate cut, the important question for markets will be whether the RBA signals a follow up rate cut is imminent – we think this is unlikely. Based on recent behaviour, both the Statement and speech on Tuesday will be used to justify the move lower, keep open the possibility of lower rates, but give no hint of timing. If this were to occur again, then it may disappoint markets slightly. Lowe is also likely to continue his “gentle turning point” comments, especially with recent house price move," NAB adds.