The cash rate is tipped to remain on hold at 1.5 per cent when the RBA meets today for the first time this year, due to weaker-than-expected inflation results.
Of the 300 brokers surveyed by online mortgage platform HashChing ahead of the RBA’s meeting today, 85.94 per cent believe that the RBA will keep the rate on hold today.
Meanwhile, 65.45 per cent believe that rates will rise in 2017.
A RateCity.com.au analysis of over 30 key economic indicators — both domestic and international — also suggests that the RBA will stay its hand.
Peter Arnold, data insights director at RateCity.com.au, explained that while lower than expected, consumer price data (both headline and underlying inflation) was mostly in-line with the RBA’s forecasts.
He elaborated: “The RBA will be inclined to keep official rates steady after the latest figures saw consumer prices rise by 1.5 per cent for the year to December and 0.5 per cent for the quarter.”
Further, Mr Arnold highlighted that the country’s unemployment recently increased slightly to an 11-month high of 5.8 per cent, due to a lift in the number of people looking for work (rather than job losses).
“Meanwhile, the so-called ‘Trump Trade’ is gaining momentum, with hopes of deregulation and a booming US economy adding to the likelihood of interest rate hikes by the US Federal Reserve leading to rises in the US dollar, which is expected to cause further volatility for our currency,” he added.
Of the brokers surveyed by HashChing, 72.73 per cent said they haven’t seen any impact on the home loan market by global factors, including the current political upheaval in the US.
RateCity.com.au’s Mr Arnold conceded that none of these factors are likely to influence the RBA’s decision today on rates. Instead, the focus is on the RBA’s Statement on Monetary Policy, which will be released on Friday and will include updates on forecasts for growth and inflation.
[Related: Flavell warns of further rate hikes in 2017]