Analysts at TD Securities offer key insights on how to trade the October Reserve Bank of Australia’s (RBA) interest rate decision due on Tuesday at 0430 GMT.

“Oct OIS is pricing ~ a 75% chance to a 25bps RBA cut tomorrow and TD along with the bulk of the analyst community (BBG: 19/25, Reuters: 25/36) expect the RBA to ease. We're received Oct'19 OIS. Q2’19 GDP at +0.5%/q missed the RBA’s +0.75%/q f/c and the RBA Gov noted in his Armidale address “we did not expect this slowdown, so it has come as a bit of a surprise”. The RBA's Sep Minutes removed reference to "the accumulation of additional evidence" for it to cut that had appeared in the Aug Minutes. With the RBA playing catch-up to achieve its late 19/20 GDP f/c's (that assume a 25bps Nov cut is delivered) and the rise in spare capacity supporting the Gov's claim that "wages growth looks to have stalled recently", why should the RBA wait to cut?”