The Reserve Bank of Australia (RBA) has a target inflation of 2 to 3 percent. When the Governor for the RBA makes a speech regarding the current economy market participants will pay attention to a number of areas.

Markets tend to focus on what the Reserve Bank of Australia deems as key points that could suggest future interest rate changes. For example, if the speech states that high energy costs and a rapidly expanding housing market are fueling inflation, then the financial markets will expect an interest rate increase in order to suppress inflation. Markets will also monitor these key sectors in the upcoming period in order to gauge the likelihood of a rate increases continuing in the future.

Markets focus heavily on the language used in the Governor's speech. If the Governor is cautious about the inflationary outlook for the economy ("Hawkish"), then the market sees a higher likelihood of future rate increases. Optimism in the Governor's outlook ("Dovish") would suggest to markets that inflation is in check and that future rate increases are less likely, with the possibility of declines in rates.

The Governor's speech is also an opportunity to better understand what his or her goals are in managing the RBA, changes in the bank's policies, and what stance he or she may take on controversial economic issues. For example, some Governor's promote a weaker currency in order to promote the export sector. In this example the Governor would keep interest low so that the Australian Dollar would depreciate against foreign currencies so that imports will lessen and exports will increase. Speeches are opportunities for Central Bank Governors to explain how monetary policy may be implemented.

Relevance : Tends to move markets on release
Release Schedule : The Board normally meets eleven times each year, on the first Tuesday of the month except in January.
Source of Report : Reserve Bank of Australia
Web Address : http://www.rba.gov.au/
Address of Release : http://www.rba.gov.au/Speeches/index.html