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Through most of the summer, it appeared that the RBA had hit the bottom of their cutting cycle. And it was just a matter of how long the reference rate would stay at 0.25%.

The lockdown in the state of Victoria, however, has changed the analysis. This led to an increasing number of analysts suspecting more action on the monetary policy front.

The RBA estimates that the COVID outbreak in Melbourne had around a 2% negative impact on GDP this year.

Forecasts were for GDP to drop 6% this year, before returning to growth at 4% next year. This was according to the Reserve Bank projections.

Expectations are for the federal government to unveil a massive increase in spending. In addition, some analysts project the RBA to join in a two-pronged initiative to boost the economy.

What Could Move the Market

The consensus among surveyed economists is that the RBA will hold rates unchanged, by a 8:2 margin.

Governor Lowe has been adamant that negative rates are a possibility, but very, very unlikely. ...

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