Minutes of April RBA meeting appeared to be rather balance. RBA sounded upbeat and said over 2018, GDP growth was expected to “exceed potential. CPI inflation was expected to “increase gradually” to a little above 2% target. Also, leading indicators continued to point to “above-average growth in employment” in the period ahead.
However, RBA also warned that “the possibility of an escalation in trade restrictions represented a risk to the global outlook that needed to be monitored closely”. Additionally, “the high level of debt in China and the significant share of financial market activity in unregulated sectors continued to pose important risks to the outlook for the Chinese economy”.
Regarding exchange range, RBA reiterated that “an appreciation of the Australian dollar would be expected to result in a slower pick-up in economic activity and inflation than forecast.”
On monetary policy, RBA also reiterated that the next move “would be up, rather than down”. But still, “there was not a strong case for a near-term adjustment in monetary policy”.