Australia's central bank kept its cash rate at an all-time low of 1% on Tuesday, expecting recent back-to-back policy easing to boost broader economic growth in coming quarters, though it left the door ajar for further cuts. The Reserve Bank of Australia's (RBA) quarter-point reductions in June and July have struggled to gain traction amid tepid consumption at home and global uncertainty cast by the Sino-US trade dispute.

Indeed, data out earlier showed Australia's household sector was battling miserly wage growth and subdued home prices with retail sales unexpectedly falling 0.1% in July. Annual growth braked to 2.4%, the slowest pace since the start of 2018. RBA Governor Philip Lowe acknowledged domestic consumption was the main economic uncertainty, reiterating it was "reasonable to expect" lower for longer interest rates to help boost employment growth and inflation.

"The Board will continue to monitor developments, including in the labour market, and ease monetary policy further if needed," to support growth and inflation targets, Lowe said in a short post-meeting statement. Financial futures are pricing in a third cut to 0.75% by October and a fourth to 0.5% by early next year.

Lowe held out hope for stronger consumer spending in coming months helped by a pick-up in household disposable income from recent tax cuts and a "stabilisation" of the country's subdued housing market.

Copyright Reuters, 2019