Analysts at TD Securities note that the RBA published its semi-annual Financial Stability Review today and it acknowledged a greater chance of weaker growth.

“Risks revolving around from external shocks (trade and financial links), high household debt (could curtain consumption) and housing (further out risk of rapid growth in prices given low supply but growth in population). Nonetheless the RBA believes the Australian banking system is resilient to downside risks with Banks holding adequate levels of capital/ liquid assets and implementing Loss Absorbing Capacity with APRA’s direction. Given the ability to withstand these shocks, the RBA warned lenders not to be too strict when assessing borrowers as this could dent economic activity.”