Australia's central bank keeps rates unchanged due to trade tensions concerns

On Tuesday, the Reserve Bank of Australia (RBA) announced its decision to keep rates unchanged at 4.1%, as expected. At the same time, the regulator's rhetoric was slightly changed towards further easing amid worries over rising global trade tensions.

The central bank's governing council noted its readiness to respond to international headwinds if they have significant implications for business activity and inflation in Australia.

As indicated by RBA's Governor Michelle Bullock at a press conference, some shift in stance towards a softer approach does not necessarily mean an imminent rate cut in May. According to her, the country's labor market remains tight. In this regard, the Reserve Bank of Australia is going to remain cautious and wait for the release of additional data on the job market and inflation in the country.

Reuters reports that swap rates changed after the RBA's decision was announced, indicating a 60% chance of a rate cut in May.

According to Adam Boyton, head of Australian economics at ANZ, such announcements give the RBA some leeway on future monetary policy moves.