Prashant Newnaha, the senior Asia-Pacific rates strategist at TD Securities, notes that the RBA Governor delivered a speech in Canberra today titled "Some Echoes of Melville" and it focused on appropriate RBA objectives and a discussion of the current low global interest rate environment.

• “There was nothing in today's speech to indicate the Bank is looking to cut the cash rate imminently and the Governor made no mention of 'spare capacity' or of 'unconventional' monetary policy. That said the Governor indicated the Board is willing to cut rates further if needed but deemed negative rates as 'extraordinarily unlikely' in Australia.
• Today's speech clearly outlined the environment in which the Bank is setting interest rates. With the Governor recognizing "monetary policy is not working in exactly the same way it used to", one could interpret today's speech as initiating the discussion around policy options and trade-offs that ultimately see the Bank resorting to 'unconventional' policy next year.”