The Bank would need to change guidance and remove its soft tightening bias. But the RBA does not have the data to back a dovish shift. Also, markets and central banks are pushing back on imminent rate cuts so why would the RBA turn dovish? AUD/USD -0.8%.

With GDP in line with RBA expectations and signs of sticky inflation offshore, the Bank has no pressing need to change the script. Guidance therefore should remain unchanged with the Bank reiterating: 1) Inflation is moderating but remains high; 2) The outlook is uncertain, and 3) Returning inflation to target is the priority. AUD/USD +0.2%.

The Bank has already indicated it may need to tighten further. After softening its hawkish bias last month vs Dec'23, we see no compelling argument for the Bank to turn more hawkish again. AUD/USD +0.6%.