Policy on hold, but the RBA may tweak its views on the global economy

The RBA (Tuesday) is expected to keep the cash rate unchanged at a record low of 2% given that the Governor recently said he was "pretty content" with current policy. However, the accompanying press release may be tweaked to reflect continued volatility in global markets and the downside risk from China. 

The statement may acknowledge early signs that the latest round of tougher macroprudential measures is cooling investor demand for housing. 

"As for our own view of policy, we see policy on hold for an extended period, but continue to see the risk of a further cut, particularly given the increased uncertainty around China", notes Barclays.