In a widely expected decision, the Reserve Bank of Australia held its cash rate at 1.50% today and took an optimistic view on domestic activity.

"The Australian economy is performing well," RBA governor Philip Lowe said in a statement, while predicting a further fall in unemployment.

Yet as consumer prices remain subdued - a major reason for the RBA's steady stance in the past two years - policy makers have shown no urgency to tighten rates. Markets are not fully pricing in a rate rise until well into 2020.

"Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual," Lowe said.

He repeated the outlook for household consumption was a "continuing source of uncertainty" as incomes remained weak while debt levels were high.

The GDP report is due on Wednesday and is forecast to show growth of 0.6% in the September quarter from the June quarter when the economy expanded 0.9%. Annual growth was likely 3.3%, tracking a brisk 3.4% the previous quarter.

Lowe expects Australia's economy to expand at an annual 3.5% pace over this year and next, helped by solid business investment and strong public spending on infrastructure. His optimism was supported by stronger-than-expected data from the Australian Bureau of Statistics earlier in the day.

Figures showed government spending climbed 1.1% in the third quarter to an inflation-adjusted AUD 109.7 billion.

Public spending accounts for almost a quarter of annual GDP and has been a major driver of growth over the past year or so.

Separate figures showed net exports likely added around 0.4 percentage points to GDP growth last quarter, largely led by liquefied natural gas and tourism. That helped shrink Australia's current account deficit to AUD 10.7 billion.

MyFXspot.com is an independent macroeconomic consultancy with thousands of subscribers all over the world. We provide fundamental research to help our clients make better investing decisions. Our subscribers should expect to get access to:

1Trading ideas (entry, take profit, stop loss)

Precious metals: GOLD, SILVER

Stocks: S&P 500, DAX, SHANGHAI COMPOSITE

Commodities: WTI OIL

Forex: EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD

2Investment Clock - great quantitative tool for investors

Different asset classes sectors tend to perform better than others at different phases of the economic cycle. We estimate current phase of the economic cycle and the Investment Clock shows which asset classes have historically outperformed in current phase of the economic cycle according to our research.

3Essential market news, technical and fundamental analysis, reviews of central bank decisions

We provide you regular commentaries on important economic and market issues and events, previews and forecasts of forthcoming data releases resulting from our knowledge, experience and quantitative tools.

4Last but not least

We describe fundamental factors, discuss recent changes in trends, resort to numerous quantitative tools and much more. You are able to take a close look at how we come to our conclusions and decide whether you share our current opinion regarding the market, but at the end of the day, it is you who decides what to do with your capital. That is why we strongly recommend you to conduct your own research and always rely on common sense – nobody knows what might work out for you just as you do.

Monthly

Subscription

$49.90

 
First week FREE
You can cancel at any time
CONTINUE

Quarterly

Subscription

$119.70

per month: $39.90
First week FREE
You can cancel at any time
CONTINUE

Annual

Subscription

$238.80

per month: $19.90
First week FREE
You can cancel at any time
CONTINUE

VAT tax will be added for EU individuals.

Cron Job Starts