Commonwealth Bank of Australia expects the Reserve Bank to keep the official cash rate unchanged at 4.10% in April, with policymakers likely to strike a more dovish tone as they await the March quarter inflation report. While the RBA has maintained a modestly hawkish stance since its February rate cut—signalling a reluctance to ease again so soon—CBA believes softer domestic data and moderating inflation could open the door to a cut in May.

In summary:

• recent run of domestic data has on balance been a little softer than the RBA forecasts imply
• totality of the data is not sufficiently soft that the cash rate will be cut April 1
• RBA officials have retained a modestly hawkish narrative since the February cut … so back-to-back rate cuts seem unlikely as it would signal too large a shift in the Board’s view on the economy in a short space of time
• on-hold decision to be accompanied by a more dovish stance
• we believe a Q1 25 trimmed mean outcome below the RBA’s 0.7%/qtr forecast means a 25bp rate cut in May is a done deal

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Earlier:

I’ve only seen one analyst forecast a cut, of 25bp, tomorrow.

The Reserve Bank of Australia Statement is due at 2.30pm Sydney time on Tuesday, April 1, 2025.

0330 GMT

2330 US Eastern time

Reserve Bank of Australia Governor Bullock’s news conference follows an hour later.