RBA Minutes

Yesterday the RBA released the minutes from it's May 5 meeting. The minutes tried to appear upbeat and implied a further pause and as such the market has priced in a reduced chance of further rate cuts for the moment. My take on it however is that with unemployment likely to increase over coming months and companies continuing to find it difficult to refinance maturing debt, one or two further cuts are still probable. Unemployment is the key indicator to watch at the moment though. In the past the RBA has continued easing as unemployment grew. Things are a little different now as they were more preemptive this time than in the past. We still have a long way to go though.

For a complete copy of the minutes go to http://www.rba.gov.au/MonetaryPolicy/RBABoardMinutes/2009/rba_board_min_05052009.html

Also yesterday, Glenn Stevens alluded in a speech to the strength of our economy and the benefit we will receive from China's returning growth. These factors worked to support the pause argument.