What to Watch in the Upcoming RBA Policy Decision

Inflation assessment

If the statement upgrades inflation risks (e.g. “inflation has proven more persistent than anticipated,” “we see upside risks from energy, services, import cost pressures”). The August statement notes inflation has eased as expected into the 2-3% range.

That would make the RBA more cautious about cuts and could support AUD strength / flatten AUD weakness

Guidance on future easing / timing

Any stronger language indicating sooner cuts (e.g. “if conditions evolve, we may ease in November / December”) versus previous “hold and monitor”

A more dovish forward guidance helps push rate expectations lower, weakening AUD crosses

Labor market / wage pressures

If the RBA expresses more concern about lingering wage growth or labor market tightness than it did in August. The current assessment is that the labor market has "eased slightly but capacity constraints remain." An upward revision to wage forecasts would be a key trigger.

That would temper markets’ expectations of aggressive easing, giving support back to AUD

Global / external risk language

If the statement amplifies concerns about a global slowdown, particularly regarding China or the impact of US tariffs. The August view was that the risks of a "damaging trade war appear to have diminished somewhat," though the outlook remains skewed to the downside.

Strengthening the external risk narrative supports a cautious or dovish tone; less risk talk would allow more hawkish posture

Electricity rebates & administered price reversal

In prior statement, rebates had depressed headline inflation; if this reversal is flagged earlier or larger than expected, that would suggest inflation could reaccelerate

That could push RBA to delay cuts or remain more restrictive

Change in conditionality / “if” to “when” phrases

If RBA moves from “if economic conditions warrant” to “when” or similarly more deterministic language about cuts.. The August statement is firmly in the conditional camp.

A more committed tone toward cuts would boost market expectations of cuts

Monetary policy reaction function

If they provide a clearer path (e.g. number of cuts, timing) or narrow the range of uncertainty

More clarity leads to more confident market positioning and potentially sharper AUD moves

Q&A tone shift / less equivocation

In the press conference, if the Governor or Board is more definitive (less “depends on data,” more “likely to” or “we expect to”)

That transparency or conviction would strengthen or weaken AUD depending on direction

Forecast or baseline revisions

Upgrades/downgrades to growth, inflation, employment forecasts relative to the last statement. The current forecasts are for GDP growth to reach 2.1% by late 2026, unemployment to stabilize at 4.3%, and trimmed mean inflation to remain around 2.6%.

A more cautious growth outlook might lean dovish; upward inflation revisions might push a more hawkish tilt