According to Jinshi Data, Bank of America pointed out that it expects the Reserve Bank of Australia to keep interest rates unchanged at 4.35% at next week's interest rate decision. Second quarter inflation data showed that the underlying inflation momentum has slowed, albeit slowly.

Bank of America expects the RBA to acknowledge that the current policy rate is moving in the right direction to reduce price pressures, but slow progress back to target is likely to mean rates will remain on hold for some time. The committee is also likely to highlight relative weakness in the consumer sector.

Bank of America does not expect major changes to the RBA's economic forecasts, but there may be small adjustments after the release of the second quarter data, especially a slight increase in the year-on-year forecast for the final mean CPI, which should still return to the target level in 2025.