Rates

The RBA will meet tomorrow to discuss Monetary Policy. Expectations are for a pause following a rapid succession of six rate hikes, with a brief pause in the middle, since October last year. The hike's impact are beginning to show up in retails sales figures and Virgin Blue's announcement that they have seen a 'rapid deterioration' in leisure travel is a good indication of the effect on discretionary spending.

The other factor supporting a pause is obviously the continues uncertainty swirling around Europe.

The length of the pause is dependent on a wide range of factors, including Europe and China, but if / when inflation places the RBA 2%-3% target under pressure later in the year they will resume the hikes.

National Accounts figures are also due this week and are likely to show that growth slowed to around 0.6% last quarter from 0.9% in the previous three months.