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BUZZ COMMENT-RBA to remain on hold and avoid surprises on Tuesday – Reuters

Dec 3 (Reuters) – The Reserve Bank of Australia is unlikely to spring any surprises at its Dec 7 policy meeting based on recent comments from Governor Philip Lowe and due to the uncertainty caused by the Omicron variant.

All 34 economists in the latest Reuters poll expect the cash rate to remain at 0.10% on Tuesday, but a small majority now expects a rate rise in the first quarter of 2023 read more .

Following Australia’s better-than-expected third-quarter GDP read more and hawkish signals from Federal Reserve Chair Jerome Powell , there has been some speculation the RBA may introduce a hawkish pivot and perhaps even taper weekly bond purchases.

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However given all the uncertainty around the Omicron variant read more , it seems highly unlikely the RBA would do or say anything to plant the seeds of an early lift-off in the cash rate two months before their next meeting in February.

Lowe was recently dismissive of the market pricing in a rate hike as early as July next year, saying it is possible there will be no change before 2024 read more . He also said the bank would only review its policy framework in 2022 .

It is likely the RBA welcomes recent weakness in the Australian dollar and a benign, uneventful meeting on Tuesday would do nothing to reverse the trend lower.

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John Noonan is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai

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