In tomorrow's the Reserve Bank of Australia board meeting for interest rate decision, the expectations have increased that the board would decide to hold the cash rate steady at 2.0%. With the market probability of a move near to zero, that is a sharp contrast to some months ago when markets gave a 100% probability to a rate cut by February.

The rates would be on hold throughout 2016, not to be denied their fixation with lower rates in Australia markets have shifted the "100%" pricing out to October with a 60% probability by May.

We reckon that for strategic reasons the central bank would choose not to change the 2016 growth forecast until they have a clearer picture around global growth and key domestic factors, particularly housing. Unlike 2015 the growth forecasts in the Statement on Monetary Policy that are likely to print on February 5 will not require a policy response.

In fact, we look ahead for the CB would revise up its forecast for growth in 2015 from 2.25% to 2.50%. The central bank does not seem to be so concerned about the latest prints of low inflation. The current lower than expected inflation might afford the bank the scope to cut if deemed necessary but, given the performance of the labour market and the ongoing fall in the AUD that "necessity" is not seen as convincing at present.