RBA Preview: what to expect from this month's RBA’s meeting

The RBA will hold their meeting on Tuesday, April the 7th at 2.30PM.

The economic data that matters:


Unemployment Rate

Wages Growth (YoY)


Retail Sales (YoY)






What are the key themes to watch out of this RBA meeting?

The Covid-19 crisis and the outlook for the Australian economy

Market participants are increasingly resigned to the overwhelming likelihood that the Australian economy will enter its first recession in nearly 29 years because of the effects of the Covid-19 crisis. For markets, the matter now is what the probable depth and length of the recession is, and what the strength of the recovery will be once the Covid-19 shutdown concludes. In its latest communications to the market, the Reserve Bank of Australia (RBA) asserted the outlook is too uncertain to provide a view on the likely path for Australian economy. Any view, how direct or otherwise, given by the RBA about economic conditions, will be greatly picked apart by traders and analysts.

Future policy considerations and the chances of greater monetary support

Given the historic nature of the policy suite announced by the RBA at its emergency meeting in March, guidance regarding future policy was more or less non-existent, with the central bank wishing to emphasize the reasoning and benefits of its new tools. Given the RBA has only just begun rolling out its yield curve control program, and has yet to fully launch its term funding facility, it may stay reticent regarding future policy. The markets will be searching for some signs that the RBA remains open to a fully fledged quantitative easing program. And perhaps even more interest rate cuts, given the markets are baking-in a future cash rate of 0.10%.

How could the RBA meeting impact the financial markets?

Financial markets have arguably moved on from financial conditions and monetary policy as its primary concern when it comes the Covid-19 economic sudden stop. Greatest interest is in judging how countries, especially the US, the UK and some countries in Europe, are “flattening the curve” of the outbreak, and getting an idea for when an economic recovery will emerge and what “shape” it may take.

Nevertheless, guidance about the future will be crucial for market participants, and will likely result in movement in markets, however marginal.

Australian Dollar

In the short term, the Australian Dollar may pop higher following the meeting, given the interest rate market’s expectation of some sort of a rate cut this week. In the bigger picture, the AUD is trading as a global growth proxy, rather than on interest rate differentials. As a result, the currency will likely experience downward pressure in the medium-to-longer term, as the Australian and domestic economy likely slips towards recession in coming quarters.


If the RBA keeps rates at 0.25%, on an intraday basis, stocks may face some small headwinds. The ASX200 will be at the whims of economic fundamentals for the foreseeable future. However, signs that the RBA remains open to further easing, especially if that takes the form of a possible QE program, which investors were disappointed not to see at the RBA’s “emergency meeting”, could provide some support for the market.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.