The RBA this month decided to keep the official cash rate on hold at 1%.

In Australia the mixed signals from economic data weighs more heavily to the downside, however in our view the RBA will wait for the second quarter GDP growth number, which is released after this month’s board meeting, before acting.

The GDP calculation includes the recently released construction activity, which was weaker than expected, down 3.8%. All key components, such as private new dwelling construction, non-residential construction and private engineering, fell during the quarter.

The RBA has downgraded its growth forecast to 2.5% but have maintained a 2020 growth rate forecast of 2.75%.