Heads up: RBA financial coverage choice developing later at 0430 GMT

This will be the third rate cut delivered by the RBA this year, unless they are going to do the unexpected today. But in all likelihood, they should announce another 25 bps rate cut in taking the cash rate to 3.60%. As things stand, markets are pricing in ~92% odds of that happening. So, therein lies the balance of risks to any reaction for the Australian dollar.

Looking further out to year-end, traders are pricing in ~74 bps of rate cuts in total. And that’s roughly three more rate cuts, including the one today.

Going back to the RBA decision, just be wary that not all economists are of the view that a rate cut today is a given. There is a small number of outliers with Citi and BofA the two notable names in that camp.

But with the central bank expected to deliver a rate cut, the statement language is not likely to differ all too much from May. A couple of key wordings to be mindful of:

• Maintaining low and stable inflation is the priority
• The risks to inflation have become more balanced
• Inflation is in the target band and upside risks appear to have diminished
• Will be attentive to the data and the evolving assessment of risks to guide decisions
• Focused on mandate to deliver price stability, full employment and will do what is necessary to achieve that

We’ll have to see which parts they’ll be keeping, if not all of them this time around.