Happy Melbourne Cup Day!

The Reserve Bank Board met today and decided to keep official interest rates on hold at 1.5%.

The recently released September quarter inflation data confirmed that underlying inflation at 1.7% year on year was broadly in line with expectations, with fruit and vegetable price rises being offset by lower petrol prices on average. This release is probably the key determinant of the RBA's decision.

Macquarie Bank forecasts the most likely timing of further interest rate cuts to be February and May next year, as inflationary forces remain subdued.

The last RBA board meeting for 2016 will be held on Tuesday 6 December.

Next stop, US elections.

Rick Maggi