08:04 AM EDT, 09/24/2024 (MT Newswires) -- The Reserve Bank of Australia decided to leave the cash rate unchanged at 4.35% at the Monday overnight policy meeting, as effectively everyone had expected, said Societe Generale.

The policy statement was not much different from the last meeting, as it continued to show the key hawkish sentences like "Data have reinforced the need to remain vigilant to upside risks to inflation," "Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range," and "The Board remains resolute in its determination to return inflation to target and do what is necessary to achieve that outcome."

If anything, the statement tried to maintain a balance between dovish shifts and hawkish changes, wrote the bank in a note to clients. The comment on weak Q2 gross domestic product data led by consumption was accompanied by the discussion on still tight labor market conditions.

The statement no longer emphasized upside risks on inflation, though adding "sustainably" in the phrase "returning inflation to target" may be considered as a hawkish tilt.

Governor Michele Bullock's press conference also didn't contain any real surprises, though the market appeared to respond to some points, stated SocGen. Financial markets appeared to welcome the comment that the Board didn't explicitly consider a rate hike at this meeting, which was clearly different from the comments that a rate hike was considered as a viable option in the previous policy meetings.

However, Tuesday's comment was basically in line with the argument in the minutes of the August policy meeting, saying that holding the cash rate at the current level for longer than the market discounts could be comparable with the rate hike in terms of the degree of tightening, pointed out the bank.

In addition, the governor added a balancing comment that a rate cut is not on the card in the near term.

In conclusion, Tuesday's policy meeting just confirmed the RBA's relatively hawkish stance especially compared with the 50bps cut by the United States Federal Reserve. SocGen sticks to its base scenario that the RBA will implement a pivot only in Q2 next year.