Impact: 
High
Latest Release:
Date:
Forecast:
Previous/Revision:
Period:
What Does It Measure?
The Statement on Monetary Policy (SoMP) in Australia measures the economic outlook as articulated by the Reserve Bank of Australia (RBA), focusing primarily on inflation, economic growth, and employment. It assesses key indicators including GDP growth forecasts, inflation rates, and other variables that influence monetary policy decisions on a national scale.
Frequency
The SoMP is released quarterly, typically on the first Friday of February, May, August, and November, and it is considered a comprehensive review that provides final figures and assessments rather than preliminary estimates.
Why Do Traders Care?
Traders closely watch the SoMP as it provides insights into the RBA's monetary policy direction and economic outlook, significantly impacting Australian assets like the AUD, government bonds, and equities. Positive revisions in growth or inflation forecasts can lead to bullish market sentiment, while concerns over inflation may prompt fears of interest rate hikes, leading to bearish reactions.
What Is It Derived From?
The SoMP is derived from extensive economic data analysis, including various economic indicators and forecasts from the RBA’s economic models, surveys, and research. It typically incorporates insights from both domestic and international economic conditions, aligning with general industry standards for economic assessments.
Description
The SoMP serves to communicate the RBA's assessment of the Australian economy, providing updates on inflation expectations, growth forecasts, and risks to the economic outlook. By addressing both current conditions and anticipated future developments, the report offers a holistic view that influences both public and market sentiment regarding monetary policy.
Additional Notes
The SoMP is considered a leading indicator of future monetary policy direction and provides critical context for understanding broader economic trends in Australia. Its insights on inflation and growth dynamics are pivotal compared to other monetary reports or indicators, allowing for strategic economic assessments both domestically and globally.
Bullish or Bearish for Currency and Stocks
If the SoMP indicates stronger than expected growth and inflation forecasts, it can be seen as "Higher than expected: Bullish for AUD, Bullish for Stocks." Conversely, if it highlights risks of rising inflation with potential interest rate hikes, it may result in a "Lower than expected: Bearish for AUD, Bearish for Stocks." The tone of the communication regarding inflationary pressures is typically hawkish, signaling possible higher interest rates, which is generally bad for Stocks but good for the AUD due to higher expected returns on investments.
Legend
High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.
Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.
Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.
Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.
Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.
Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.
Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency
| Green Number |
Better than forecast for the currency (or previous revise better) |
| Red Number |
Worse than forecast for the currency (or previous revise better) |
| Hawkish |
Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks. |
| Dovish |
Favors lower rates to boost growth, weakening the currency but lifting stocks. |
